Operation analysis of dyeing and printing industry in H1 of 2020

by Zhao Xinhua

In the first half of 2020， the global spread of the COVID-19 pandemic has had a significant impact on my countrys dyeing and printing industry. The main economic indicators of production， investment， quality and efficiency of dyeing and printing enterprises in the first and second quarters have declined significantly compared with the same period last year， and the industry has shown a negative growth trend. Although some indicators of the dyeing and printing industry have shown signs of recovery since the second quarter， the current production and operation pressure of enterprises is still prominent， and insufficient demand is still the biggest problem that plagues enterprises. The industrys stable operation throughout the year is facing greater challenges.

The decline in the output of dyed and printed fabrics continues to narrow

According to the National Bureau of Statistics， from January to June 2020， the output of dyeing and printing enterprises above designated size was 21.995 billion meters， a year-on-year decrease of 12.04%. Since the second quarter， as the domestic situation of COVID-19 pandemic prevention and control has continued to improve， domestic economic activities have gradually resumed， and since May， foreign markets have been opened up， textile terminal market demand has rebounded， and the decline in output from January to June has narrowed by 2.42 percentage points.

Operational quality has further declined compared with the previous month， and business operations continue to be under pressure

According to data from the National Bureau of Statistics， from January to June 2020， the three expenses ratio of dyeing and printing enterprises above designated size was 7.53%， an increase of 0.71 percentage points year-on-year. Among them， cotton dyeing and printing enterprises accounted for 7.16% and chemical fiber dyeing and printing enterprises were 10.25%. The finished product turnover rate was 7.58 times/year， a yearon-year decrease of 30.79%； the accounts receivable turnover rate was 3.59 times/year， a year-on-year decrease of 26.67%； the total asset turnover rate was 0.41 times/year， a year-on-year decrease of 24.21%.

On a month-on-month basis， the ratio of three expenses to enterprises increased by 0.16 percentage points from January to June， the decline in finished product turnover rate narrowed slightly by 0.32 percentage points， and the decline in accounts receivable turnover rate and total asset turnover rate increased by 1.82 and 2.19 percentage points， respectively. The pressure on corporate capital turnover has not yet been significantly eased， and the operational pressure is still relatively high.

The economic benefits of the enterprise have further deteriorated

According to the National Bureau of Statistics， from January to June 2020， the main business income of dyeing and printing enterprises above designated size was 105.115 billion yuan， a year-on-year decrease of 21.81%； the main business cost was 92.506 billion yuan， a yearon-year decrease of 21.62%， accounting for 88.00% of the main business income； expense margin was 3.30%， down 1.15 percentage points year-on-year； sales profit rate was 3.16%， down 1.05 percentage points year-onyear； realized total profit was 3.316 billion yuan， a year-onyear decrease of 41.46%； completed export delivery value of 15.087 billion yuan， a year-on-year decrease of 23.95%.

665 dyeing and printing enterprises above designated size suffered losses， accounting for 42.46%， an increase of 18.84 percentage points year-on-year； the total loss of loss-making enterprises was 1.887 billion yuan， a significant increase of 92.37% year-on-year.

From a month-on-month point of view， although the decline in the production of dyed and printed fabrics has narrowed since June， the profitability of enterprises has fallen slightly compared with that in May， and there is still greater pressure to improve efficiency.

The export situation has improved， but the recovery process is relatively slow

According to the statistics of China Customs， in the first half of 2020， the total import and export value of eight major categories of dyeing and printing products in my country was USD 10.064 billion， a year-on-year decrease of 29.17%； the trade surplus was USD 8.922 billion， a year-onyear decrease of 28.62%.

The import volume of eight major categories of dyeing and printing products was 269 million meters， a year-on-year decrease of 40.95%； the import value was USD 571 million， a year-on-year decrease of 33.19%； the average unit price of imports was USD 2.12 per meter， an increase of 13.15% year-on-year.

The export volume of eight major categories of dyeing and printing was 9.695 billion meters， a year-on-year decrease of 25.45%； the export value was USD 9.493 billion， a year-on-year decrease of 28.91%； the average export unit price was USD 0.98/meter， a year-on-year decrease of 4.64%.

On a month-on-month basis， the decline in the export volume and export value of the eight major categories of dyeing and printing products from January to June narrowed slightly by 0.92 and 0.63 percentage points， respectively， indicating that the export situation has improved， but the recovery process is relatively slow.

Major export markets

From the perspective of major export markets， from January to June 2020， the export volume of the eight major categories of dyeing and printing products to the United States and the European Union， which are severely affected by the pandemic， fell by more than 30%， but the decline was narrowed by 2.27 and 1.08 percentage points respectively； the export volume and export value to countries along the “Belt and Road” both fell by more than 20%， and the decline narrowed slightly by 0.90 and 0.64 percentage points respectively； exports to Japan performed relatively well， but with the rebound of the domestic pandemic in Japan since the second quarter， the export volume and export value of the eight major categories of dyeing and printing products to Japan have an expanding trend， which is 1.63 and 2.15 percentage points higher than that in May， respectively （see the table below）.

At present， the global pandemic is still spreading and the prospects are still highly uncertain. The impact of the pandemic on the operation of global supply chains and economic operations will continue to develop， and the industry will still be under pressure to maintain stable operations throughout the year. Looking forward to the second half of the year， the continuous accumulation of positive factors such as the continuous development of national macro policies and the further release of domestic demand will provide an important guarantee for the return of the industrys economy to a normal track.