Fengzhu Textile Mid-Term Net Profit Nearly Cut, Textile Industry In The First Half Of The Collective Cold

On the evening of August 10, the semi annual report disclosed by Fengzhu textile (600493. SH) showed that the company's net profit decreased by 48.88% year on year due to the sharp decrease in operating profit of Jiangxi subsidiary and the expenses of taxes and fees and organization expenses of Henan subsidiary. Industry insiders said that affected by the epidemic, the textile industry suffered cold in the first half of the year, but the export of the industry has improved. The reporter of the financial association noted that the price of the main products of the comparable enterprise Runtu (002440. SZ) "the price of the main products is weak", and the Jingwei Textile Machinery Co., Ltd. (000666. SZ) "is seriously insufficient", and the net profit in the first half of the year is expected to drop by 49.24% - 55.28%.

In the first half of the year, Fengzhu textile achieved a revenue of 419 million yuan, a year-on-year decrease of 18.19%, and a net profit of 09 million yuan, a year-on-year decrease of 48.88%. In the first quarter, revenue fell by 24.70% and net profit fell by 77.40%. The second quarter performance improved, but it was hard to escape the adverse trend. The announcement shows that many brands and traders cancel orders, which directly impacts the front-end demand of China's industrial chain.

It is worth noting that under the pressure of performance, the accounts receivable of Fengzhu textile increased by 36.55% in the first half of the year, and the prepayment increased by 72.59% year on year. The company explained that the sharp increase in receivables was mainly due to the increase in receivables from export customers in the current period, and the significant increase in prepayments compared with the beginning of the year, mainly due to the increase in prepayment for equipment and raw materials in the current period.

In view of the situation that textile industry performance is under pressure but the receivables / prepayments are growing, on the evening of August 10, a reporter from the Financial Association called Fengzhu textile, but the relevant staff only replied that "the orders in hand are OK" and said, "what can be said has been said in the annual report."

Fengzhu textile is located in the middle reaches of the textile industry. Its main business is the production and processing of knitted and woven colored fabrics. It is positioned in the middle and high-end product market. Its main market and customers are concentrated in Fujian Province and radiate to the whole country. 70-80% of the company's products are indirectly exported to Hong Kong, Taiwan, the Middle East, Europe, America and Japan in the form of clothing.

According to the data of the General Administration of customs, China's exports in July increased by 10.4% year-on-year, while imports in July increased by 1.6% year-on-year, and exports of textiles and other products increased. However, the export of textiles, including masks, decreased by 632.43 billion yuan.

Jingwei Textile Machinery said that in the first half of the year, affected by the new crown pneumonia epidemic, export orders of the textile industry dropped sharply, and the construction was seriously insufficient. Runtu shares also said that textile and clothing exports have been hit, the confidence of downstream textile printing and dyeing enterprises is insufficient, and the price of the company's main products is weak. Senma apparel (002563. SZ) is a "broken arm" overseas business. Through the sale of subsidiary assets, the company realized the divestiture of the assets and business of kidiliz group (sofiza owns 100% equity of kidiliz group), which is conducive to reducing operational risk and avoiding greater loss of company performance.