As of March 11, 2022, 50 listed textile and garment companies in Shanghai, Shenzhen and Beijing in 2021 earnings preannouncement have been disclosed. The earnings preannouncement shows that since 2021, the textile sector has gradually recovered after the normalization of the pandemic, and the prosperity of the segmented sector is clearly differentiated.
The earnings preannouncement shows that a total of 30 companies with pre-growth, pre-profit, profit in performance, accounting for 60 percent; a total of 20 companies with pre-reduction and pre-loss in performance.
According to the statistics of expected net profit growth, a total of 24 companies’ net profit growth exceeded 50 percent. Of which, the net profit growth rate of 8 companies is more than 200 percent, the highest growth rate of net profit attributable to shareholders of listed companies is about 2146 percent-2356 percent, the lowest growth rate is about 207 percent-239 percent; IN The other 13, the highest growth rate of net profit attributable to shareholders of listed companies was about 195.11 percent-246.43 percent, and the lowest growth rate was about 52 percent.
Looking back on the textile and apparel industry in 2021, some securities analysis institutions believe that brand clothing had an obvious trend of high in the early stage and low in the late stage in 2021, and were strongly influenced by pandemic and a slowing economy in the second half of the year. Export manufacturing, benefiting from the recovery of external demand and the improvement of its own competitiveness, had maintained a rapid growth, and will remain a bright spot for the growth of the textile and garment industry in the short term.
Despite the continuation of the global COVID-19 outbreak, rising upstream raw material prices, downward pressure on consumption, unilateralism and other superimposed factors, there are still many companies to recover growth by improving their production efficiency, increasing capacity utilization and expanding online and offline channels.
The main domestic nylon 66 producer Shenma Industrial Co., Ltd. disclosed 2021 annual earnings preannouncement. The company is expected to realize net profit attributable to shareholders of listed companies during the reporting period of 2.054 billion yuan to 2.271 billion yuan, which will increase 1.684 billion yuan to 1.9 billion yuan compared with the same period last year, a year-on-year growth of 454.41 percent to 512.78 percent.
Shenma Industrial Co., Ltd. said that the main reason for the pre-increase in performance during the reporting period is that the price of the company’s main products cord cloth, industrial silk, slice has risen significantly in 2021, resulting in a significant increase in profits compared with the same period.
BROS Eastern CO., Ltd. specialized in research & development, manufacturing and marketing of top-dyed mélange yarn, with advantages such as customer resources, production capacity layout and technology, and a stable leading position in the industry. According to the earnings preannouncement, the net profit attributable to shareholders of listed companies is expected to be 1.33 billion to 1.39 billion yuan, an increase of 263 percent to 280 percent compared to the same period last year. The main reason for this pre-increase is that the company’s overall capacity returned to pre-pandemic levels in 2021, capacity utilization was improved, orders increased, and profits from main businesses increased.
Cinda Securities research report pointed out that the overall demand of the textile sector is under pressure, but some companies are expected to grow relatively well. As the leading companies in the industry, there are more orders, and the performance of high-quality companies may exceed expectations.
However, many companies are still affected by the continuing COVID-19 pandemic, the consumer environment, rising labor costs and industrial restructuring. Industry insiders believe that the prosperity of leading companies in the textile sector is relatively high. The annual operating performance of some brand apparel sectors showed a downward trend.
From the perspective of brand clothing sector, during the reporting period of Anzheng Group, the net profit attributable to shareholders of listed company will decrease by about 100 million to 136 million yuan compared with the same period of last year, a year-on-year decrease of 52.92 percent to 68.61 percent. First, the sales of the company’s clothing sector declined in the fourth quarter; second, the performance of operation service continued to decline in the fourth quarter.
Affected by the overall consumption environment and organizational reform and adjustment, the revenue and profit of Shanghai Lishang Information Technology Co., Ltd. declined significantly, and the annual net profit attributable to shareholders of listed companies decreased by about 46 million yuan. In addition, in 2021, the optimization and adjustment of some cooperative brands by Lishang Information also resulted in a certain decline in business performance.
According to Cinda Securities research report, China’s garment industry in the long run needs to extend to high value-added marketing and design, and high-quality domestic brands will promote industrial transformation and upgrading.