In 2020, COVID-19 continued to spread. China’s dyeing and printing industry was hard hit by the pandemic, and the industry still maintained a positive development trend. By the end of 2020, the capacity utilization of dyeing and printing enterprises has basically returned to the level of the same period in 2019, but the business operation and profitability of the company are still significantly lower than the same period in 2019, and the industry is still facing greater pressure to return to the level before the pandemic.

1. Steady recovery in production growth

According to data from the National Bureau of Statistics, the output of dyeing and printing fabrics of dyeing and printing enterprises above designated size was 52.503 billion meters from January to December, a year-on-year decrease of 3.71 percent. The decline in output narrowed by 3.50 percentage points from January to November, the largest since the fourth quarter.

 

In December, the output of dyed and printed fabrics reached 6.254 billion meters, an increase of 16.98 percent year-on-year, which was the largest single-month output since 2020. Since September, the monthly output of dyed and printed fabrics has achieved positive growth for four consecutive months, indicating that industry production has accelerated since the fourth quarter.

 

2. The operating quality continues to improve, but the recovery process is relatively slow

According to the National Bureau of Statistics, from January to December, the proportion of three expenses for dyeing and printing enterprises above designated size was 6.97 percent, an increase of 0.28 percentage points year-on-year, of which 6.70 percent was for cotton dyeing and printing enterprises and 9.01 percent was for chemical fiber dyeing and printing enterprises. The finished product turnover was 17.85 times per year, a year-on-year decrease of 20.05 percent; the accounts receivable turnover was 7.99 times per year, a year-on-year decrease of 21.31 percent; the total asset turnover was 0.94 times per year, a year-on-year decrease of 14.95 percent.

 

Compared with January-November, the proportion of enterprise three expenses from January to December decreased by 0.02 percent; the decline of finished product turnover, accounts receivable turnover, and total asset turnover respectively narrowed by 2.63, 2.76, and 1.34 percentage points. Since the third quarter of 2020, as the domestic pandemic prevention and control situation continues to improve, the operation quality of the dyeing and printing industry has continued to improve. However, compared with the production recovery process, the main operation quality indicators from January to December 2020 still have a significant gap with the same period in 2019. It will take time for the industry to achieve a full recovery.

 

3. Economic benefits continue to recover, but profit pressure remains prominent

According to data from the National Bureau of Statistics, the main business income of dyeing and printing enterprises above designated size was 254.132 billion yuan from January to December, a year-on-year decrease of 12.15 percent; the main business cost was 218.995 billion yuan, a year-on-year decrease of 11.91 percent, accounting for 86.17 percent of the main business income; the total profit was 12.668 billion yuan, a year-on-year decrease of 19.01 percent; the cost profit margin was 5.35 percent, a year-on-year decrease of 0.49 percentage points; the sales profit margin was 4.98 percent, a year-on-year decrease of 0.43 percentage points; the completed export delivery value was 34.591 billion yuan, a year-on-year decrease of 16.83 percent.

 

Compared with January-November, the decline of main business revenue and total profit from January to December narrowed by 1.88 and 3.90 percentage points respectively, the cost profit margin and the sales profit margin increased by 0.39 and 0.34 percentage points respectively, and the decrease of export delivery value narrowed by 1.11 percentage points.

 

From January to December, there were 431 loss-making enterprises in 1,581 dyeing and printing enterprises above designated size, the percentage of loss-making enterprises was 27.26 percent, an increase of 8.34 percentage points year-on-year, and narrowed 4.24 percentage points from January-November; the total loss of loss-making companies was 1.889 billion yuan, an increase of 15.82 percent year-on-year, the growth rate narrowed by 18.79 percentage points from January to November.

 

After the great fluctuation in the first half of the year, the main economic indicators of the dyeing and printing enterprises gradually recovered in the second half of the year. Corporate profitability improved significantly compared with the first half of the year, but the year-on-year decline was still relatively large. The industry’s profit situation needs to be further consolidated.

 

At present, the global pandemic has not yet been fundamentally alleviated, the external environment is still highly uncertain, the foundation for industrial recovery is not yet strong, and the industry’s costs have increased, environmental protection tasks are arduous, and market competition has intensified. The industry faces many difficulties in maintaining stable operation. But at the same time, China, as the only major economy in the world to achieve positive growth in 2020, shows strong resilience of economic development, which provides a strong guarantee for the continuous recovery of the dyeing and printing industry. In 2021, under the background of accelerating the construction of a new “dual circulation” development pattern, relying on China’s largest and most complete textile industry system in the world, the dyeing and printing industry has the foundation and the condition for achieving steady improvement in economic operations.