Hongjing

Industry output decreased in the first quarter, and capacity utilization rate was low

Since 2012, due to insufficient domestic and foreign demand, high upstream dye costs, and increasing pressure on environmental protection and emission reduction, the industry's output scale has decreased year by year. It rebounded in 2016 and reached 49.069 billion meters in 2018. From January to December 2019, the output of printed and dyed fabrics by large-scale printing and dyeing enterprises reached 53.763 billion meters, an increase of 2.80% year-on-year, and the growth rate increased by 0.17 percentage points compared with 2018. In the first quarter of 2020, the output of printed and dyed fabrics by large-scale printing and dyeing enterprises was 9.401 billion meters, a decrease of 15.15% year-on-year. In February 2020, the domestic epidemic prevention and control situation was severe, and transportation and logistics were blocked, making it extremely difficult for the industry to resume work and production. Since March, with the improvement of the domestic epidemic prevention and control situation, the resumption of work and production has been continuously promoted, and the decline in output has narrowed by 7.27 percentage points compared with January and February. By the end of the first quarter of 2020, although the resumption rate of the printing and dyeing industry reached a high level, the overall capacity utilization rate remained low.

Industry operating efficiency decreased in the first quarter, and the loss ratio of enterprises increased

According to data released by the National Bureau of Statistics, from January to December 2019, 1,633 large-scale printing and dyeing enterprises achieved main business income of 283.153 billion yuan, an increase of 0.83% year-on-year; and a total profit of 15.835 billion yuan, an increase of 6.49% year-on-year.

In the first quarter of 2020, affected by the epidemic, domestic and foreign demand weakened, most enterprises were underutilized, and some enterprises' product prices or processing fees decreased. Coupled with the inelasticity of expenditures such as wages and rent, as well as the increase in epidemic prevention and control and logistics and transportation costs, the profitability of enterprises declined significantly. Large-scale printing and dyeing enterprises achieved main business income of 48.535 billion yuan, a decrease of 23.64% year-on-year; and a total profit of 1.213 billion yuan, a significant decrease of 43.08% year-on-year. However, compared with the data from January to February 2020, since March, with the continued improvement of the domestic epidemic prevention and control situation and the continuous improvement of the resumption rate of work and production, especially the continuous effectiveness of government support policies for the industry, the prosperity of the printing and dyeing industry has rebounded, and the decline in the main business income and total profit of large-scale enterprises has narrowed by 6.24 and 58.72 percentage points respectively compared with January and February.

From January to December 2019, there were 309 loss-making enterprises among large-scale printing and dyeing enterprises, with a loss ratio of 18.92%, an increase of 1.25 percentage points compared with 2018; the total loss of loss-making enterprises was 1.711 billion yuan, an increase of 9.76% year-on-year, and the growth rate increased by 21.24 percentage points compared with 2018.

In the first quarter of 2020, the industry's loss ratio and total losses increased significantly. Among 1,561 large-scale printing and dyeing enterprises, 745 were loss-making enterprises, with a loss ratio of 47.73%, an increase of 19.38 percentage points compared with the same period of 2019; the total loss of loss-making enterprises was 1.149 billion yuan, an increase of 72.56% compared with the same period of 2019.

Industry operating indicators declined in the first quarter, and the total import and export value of foreign trade enterprises decreased

From January to December 2019, the three-expense ratio of large-scale printing and dyeing enterprises was 6.72%, an increase of 0.16 percentage points year-on-year, of which cotton printing and dyeing finishing enterprises were 6.44%, and chemical fiber fabric dyeing and finishing enterprises were 8.92%; the cost-to-profit ratio was 6.06%, an increase of 0.39 percentage points year-on-year; the sales profit margin was 5.59%, an increase of 0.30 percentage points year-on-year; the finished product turnover rate was 21.72 times/year, a decrease of 0.80% year-on-year; the accounts receivable turnover rate was 8.17 times/year, an increase of 8.74% year-on-year; and the total asset turnover rate was 1.10 times/year, an increase of 1.44% year-on-year.

In the first quarter of 2020, the overall operation of the industry was in a difficult state, and the main quality and efficiency indicators showed a year-on-year downward trend. The three-expense ratio of large-scale printing and dyeing enterprises was 7.95%, an increase of 0.65 percentage points compared with the same period of 2019, of which cotton printing and dyeing enterprises were 7.56% and chemical fiber printing and dyeing enterprises were 11.41%. The cost-to-profit ratio was 2.60%, a decrease of 0.92 percentage points compared with the same period of 2019; the sales profit margin was 2.50%, a decrease of 0.85 percentage points compared with the same period of 2019; the finished product turnover rate was 3.58 times/year, a decrease of 38.13% year-on-year; the accounts receivable turnover rate was 1.81 times/year, a decrease of 25.25% year-on-year; and the total asset turnover rate was 0.19 times/year, a decrease of 25.25% year-on-year.

From January to December 2019, the total import and export value of eight major categories of printing and dyeing products was US$29.144 billion, an increase of 7.34% year-on-year, and the growth rate increased by 0.69 percentage points compared with the same period of 2018; the trade surplus was US$25.689 billion, an increase of 10.40% year-on-year, and the growth rate increased by 1.87 percentage points compared with the same period of 2018.

In the first quarter of 2020, the total import and export value of eight major categories of printing and dyeing was US$5.392 billion, a decrease of 17.79% year-on-year; and the trade surplus was US$4.811 billion, a decrease of 17.08% year-on-year.

The above data comes from the "China Printing and Dyeing Industry Production, Sales, Demand and Investment Forecast Analysis Report" by Foresight Industry Research Institute. Foresight Industry Research Institute also provides solutions such as industrial big data, industrial planning, industrial application, industrial park planning, and Investment.

Source: Foresight Economist

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