Recently, the performance of many clothing companies has shown a “bottoming out” trend.
Advisory news
Hongxing Co., Ltd., which specializes in home furnishings, underwear, underwear and other products, has the most eye-catching performance growth rate. It is expected that the company’s net profit attributable to shareholders of listed companies in the first half of 2023 will be 55 million to 60 million yuan, a year-on-year increase of 983.55% to 1082.06 %.
ANTA Sports In the second quarter, the retail sales of ANTA brand products (calculated in terms of retail value) recorded a high single-digit positive growth compared with the same period in 2022.
The retail sales of FILA brand products (calculated in terms of retail value) have recorded positive growth in the high range of 10-20% compared with the same period in 2022.
1 The gray fabric market partially recovers
In addition to the rebound in performance of clothing companies, the recent gray fabric market has also shown signs of recovery in the off-season. The sales of nylon products are partially moderate and heavy, and they are mainly used to make down jackets, cotton jackets, outdoor products, etc. New products of jacquard linings are emerging one after another, and the market transactions have been slightly active recently. Knitted warp-knitted fabrics have shown a slight increase in trading volume this week. The fabrics are not only suitable for making jackets, windbreakers, casual wear and other clothing, but are also widely used in bedding, footwear, toys, decorations, gloves, etc. In general, the sales volume of the gray fabric market has been slightly enlarged, but the product price trend is difficult to improve.
In recent weeks, the weaving operating rate in Shengze has mostly maintained a 1-2% decline. Due to the lower weaving operating rate in the downstream, upstream polyester production and sales have also been hovering below 50% for a long time. The printing and dyeing situation is not optimistic either. The recent arrival of gray fabrics into warehouses has been decreasing, and the operating rate is also gradually declining. Why hasn’t the weaving and dyeing factories responded to the booming situation of some fabrics in the gray fabric market?
2. Many traders have stocking operations.
The current hot sales in the gray fabric market mainly come from stocking and replenishment orders. As the price of nylon continues to rise in the recent stage, many textile companies have placed orders in advance and stocked up due to the mentality of “buying up, not buying down”, which has promoted the shipment of nylon fabrics to a certain extent. In addition, most of the more popular fabrics on the market are autumn and winter fabrics. This type of fabric is popular because, on the one hand, despite the global epidemic last year, the sales of autumn and winter textile clothing were still good in the second half of the year. Textile companies have seen the power of the autumn and winter market; on the other hand, , although the prices of some gray fabrics have increased, there are still companies selling goods to cash out, and they can still buy low-priced gray fabrics. Moreover, due to insufficient orders, printing and dyeing factories have greater discounts on dyeing fees, and traders stock up at very suitable prices.
However, these hot-selling gray fabrics will to some extent overdraw future fabric orders and digest the peak season in September and October in advance, which will lead to a decrease in orders for this type of fabrics in the second half of the year. Moreover, not all weaving companies are involved in the above-mentioned products. The number of companies that can profit from the recent hot sales is limited, and the natural start-up rate is also controlled.
Foreign trade also still restricts market demand. There have always been export orders, but the volume is small. In the past, an order was tens of thousands or hundreds of thousands of meters, but now even orders of more than 10,000 are very rare. There are even a few companies whose foreign trade orders are stagnant during the off-season. The reason why actual foreign trade orders have not recovered on a large scale is mainly due to the sharp drop in demand for clothing under the influence of the global economic downturn. It is difficult for overseas clothing manufacturers to receive new orders, resulting in very few orders from fabric manufacturers.
Postscript
Although foreign trade is the biggest variable, the second half of the year is the main shipping stage, and basic demand is bound to exist. In terms of domestic sales, residents’ overall consumer confidence and spending power are expected to improve. It is precisely because textile professionals have good expectations for the domestic sales market in the second half of the year that the current stocking operation is carried out. Against the background of optimistic consumer sentiment, the retail sales data of the domestic apparel industry will further pick up in the second half of the year, and the downstream weaving fabric market is also expected to rise.
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