The Textile And Garment Industry Is Still At A Depressing Stage.

In the whole textile and garment industry is still declining, rainbow

(02678.HK) a positive earnings forecast has raised its share price by nearly 20%.

But the industry believes that the overall decline in the domestic textile industry trend is a foregone conclusion, a single enterprise positive earnings forecast is difficult to boost market confidence.

In the three quarter, the deficit of textile enterprises is still expanding.

The announcement shows that as of the end of the 9 quarter of last 3 quarters, the company expects profits to increase substantially compared with the same period last year, and the profits in 2012 will also increase significantly.

Prior to Tianhong textile announced interim results, its net profit fell 43.3% to 145 million yuan over the same period.

The company's explanation is that China's demand for yarn products has remained stable, and the domestic cotton prices in 2012 have fallen with international upside down.

According to Zhang Bin, according to state securities, although the recent changes in cotton prices between domestic and overseas have not been specifically counted, the overall change is not very big.

According to the reporter's check, the difference between cotton prices in August and outside was narrowed at the end of 7.

"If the spread does not change much, the explanation of the company is far fetched, and it may also serve as a better performance for investors."

Independent fashion observer Ma Gang said.

Aside from the above questions, Li Hongxian, an analyst at Shang Pu consulting, told the daily economic news reporter that in the whole industry, Tianhong textile is only a case.

"Tianhong textile has a large scale and a good foundation, and its overall strength and competitiveness are in the upstream position in the domestic textile industry, which has the incomparable advantages of small and medium-sized enterprises."

Li Hongxian also said that the improvement of Tianhong textile performance also benefited from the expansion of the market price difference between the international and domestic cotton market.

It has built production bases in Vietnam, and the advantage of foreign cotton has reduced production costs and strengthened competitiveness.

Chen Changsong, a business analyst at commodity data, thinks that profits are positive for large enterprises such as Tianhong textile, but in general, profits are also decreasing as external market changes.

"The main motive force for the release of profits is probably the cotton production reduction."

The reduction of production and the increase of cotton prices will also raise the price of terminal products for enterprises, thereby increasing the profits of enterprises.

"But terminal consumption has been weak, inventory is the biggest limitation of profits, and the final performance of enterprises may still be lower than expected."

Industry deficit is still expanding.

Affected by the economic crisis, the difference between domestic and foreign market cotton prices has been widening, resulting in a large shrinkage of the company's orders.

However, the response of the whole market is that most textile mills have started to pick up in recent years.

In response, Li Hongxian told the daily economic news reporter: "the main reason for the rise in operating rate is that foreign traditional consumption has entered the peak season, but the market prospect of the whole industry is still uncertain."

"In the autumn, many raw materials are newly listed, and with the advent of winter, it is expected that consumption will lead to an increase in orders. Therefore, the increase in orders is only a short-term phenomenon. It is hard to say later."

Chen Changsong said.

Chen Changsong also told reporters that the increase in orders is only one side, which does not mean that profits will rise as well.

In the three quarter, the whole raw material market is strengthening and rising gradually.

Of the 20 products monitored by the business community, 15 products rose, accounting for 75%.

Among them, polyester filament, polyester staple fiber and acrylic fiber have bottomed out, and the increase ranges from 14.5% to 18.8%.

Textile enterprises are basically of the nature of procurement, and their costs are also increasing under the rising price of raw materials. Mr Chan said: "because of the weakness of terminal consumption, the cost of textile enterprises is rising while downstream demand has not been followed up by double oppression."

According to statistics, from 1 to June 2012, the loss of textile enterprises above designated size was 18.4%, and the deficit of loss making enterprises increased by 124.1% over the same period last year.

From 1 to August, the losses of textile enterprises increased by 101.8% over the same period last year.

Li Hongxian said, from the data point of view, the domestic textile industry deficit and loss continues to expand.

"More medium, small and micro enterprises will face the risk of knockout."

According to Chen Changsong, the price increase of raw materials mainly started in August.

"Manufacturers who were on the profit and loss line began to lose money in the past two months."

At present, domestic and foreign market price inversion is still an important factor affecting the recovery of textile industry.

Li Hongxian told reporters that the annual cotton temporary purchase and storage of China cotton storage company launched in September 10th increased by 600 yuan / ton compared with last year.

Meanwhile, the relevant departments of the NDRC said that no more cotton import quotas will be issued in the near future, which will help boost domestic cotton prices in the future.

"Whole

The bottom is not yet there. "

Zhang Bin, an analyst with state securities, said that industry consolidation is in progress, but the overall improvement will take time to observe.