Foreword: “Vietnam has always given people a poor image, with poor economic strength and poor development prospects. However, in recent years, Vietnam has been developing better and better, maintaining an economic growth of more than 6%. This is inseparable from the contribution of Vietnam’s textile industry.”
Vietnam’s “People’s Daily” reported on May 17 that due to the obvious recovery of major markets, compared with 2020, 2021 will be In 2016, the textile and garment industry was evaluated as having a bright future, thus injecting impetus into enterprises in the industry to increase operating income and profits.
Since the beginning of 2021, Vu Duc Giang, President of the Vietnam Textile and Apparel Association (VITAS), believes that due to market demand and the large-scale COVID-19 vaccination in various countries Due to the impact, Vietnam’s textile and garment industry will actively recover in 2021. In fact, the export value of textile and clothing products in the first four months of 2021 increased by 9%, reaching US$9.51 billion.
The rebound in exports has a huge impact on the operating income and profits of textile and apparel companies. For example, TNG Investment and Trading Joint Stock Company’s operating income in the first four months of 2021 reached VND1.272 trillion, a year-on-year increase of 32%. A representative of the company said that orders have been scheduled until August 2021. According to the plan, TNG proposes that its operating revenue will reach VND 4.798 trillion and its after-tax profit will be VND 175 billion in 2021, an increase of 7% and 15% respectively compared with 2020.
Century Yarn Company’s net income in the first quarter of 2021 was VND 567 billion. Although revenue fell slightly by 8.1% year-on-year, as yarn prices increased by 20% compared with the end of 2020, Century Yarn Company’s net income reached 248 billion VND, an increase of 35%. With this result, Century Yarn Company proposed that its operating income this year will reach 2.358 trillion VND, an increase of 34% compared with 2020.
Successful Trade and Investment Textile and Garment Company also proposed that operating income in 2021 will reach 4.218 trillion VND, an increase of 20%; after-tax profit will be 290 billion VND, an increase of 5% compared with 2020. .
Affected by the new coronavirus pandemic, Viet Jin Garment Joint Stock Company (VGG)’s business activities declined for the first time in 2021 after a year of decline. There was a significant change in the quarter, with net revenue reaching 1.453 trillion VND, a slight decrease of 1.4%, and after-tax profit reaching 5.2 billion VND, a significant improvement from the loss level of 21 billion VND in after-tax profit in the first quarter of 2020. According to the assessment of Fuxing Securities Co., Ltd., the operating income of Viet Tien Garment Co., Ltd. in 2021 will reach approximately 7.757 trillion VND, an increase of 8.9%, and the after-tax profit will reach 187 billion VND, an increase of 24.1% compared with 2020.
The reason why companies have set higher operating income and profit targets is because they believe that the market will recover. In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Vietnam-European Union Free trade agreements such as the Free Trade Agreement and the Regional Comprehensive Economic Partnership Agreement are also driving forces. Therefore, various textile and apparel companies have formulated strategies for the production of accessories to meet the commitments of the above-mentioned free trade agreements.
Specifically, Deng Zhaohe, general manager of Century Yarn Company, said that in the short term, the company will focus on the development of recycled yarn, and in addition will produce high-quality, high-value-added raw materials. product. In the long term, the company will increase production capacity through the synthetic fiber production plant project. This is a project with a total production capacity of 60,000 tons, focusing on recycled yarn, high-quality yarn and special yarn. The total investment in the project is approximately US$120 million. It is expected that the first phase of the project will be put into operation in 2023, and the second phase will start construction. The second phase of the project will be completed in 2025.
Like Century Yarn Company, Yue Jin Garment Co., Ltd. recently plans to establish Yuetai Technology Co., Ltd. to restart the Yuetai Technology project with a total investment of US$20 million. Invested in fabric production. This project will help Viet Chin Garment Co., Ltd. meet the rules of origin of various future free trade agreements. In 2020, more than 13% of the total operating revenue of Viet Chin Garment Co., Ltd. came from exports to the EU. Therefore, when the company can meet the rules of origin of the Vietnam-EU Free Trade Agreement, the company is expected to export more to the EU. many. Furthermore, since the Regional Comprehensive Economic Partnership Agreement does not require fabric raw materials to be produced in Vietnam or other countries in the region, as long as the cutting work is done in Vietnam, you can enjoy tax incentives for exporting to Japan. Since exports to Japan accounted for 27% of Viet Chin Garment Co., Ltd.’s total revenue in 2020, the “Regional Comprehensive Economic Partnership Agreement” will inject impetus into increasing exports to Japan in the future.
Securities companies believe that with the above-mentioned growth, stocks in the textile and apparel industry are expected to surge this year. Specifically, Century Yarn Company’s stock is expected to grow by 25%; Yuejin is expected to grow by 21%. </p
