The Devaluation Of The Renminbi Aggravated The Impact Of Textile And Garment Export Enterprises

Since the 2015.8.11 central bank announced the completion of the central parity mechanism of the US dollar to the RMB exchange rate, the US dollar has continued to rise against the yuan.

In the past two weeks, the RMB has continued to depreciate, especially 7.12, which has reached 6.6950 of the highest value in 05 years.

As of 7.15, the exchange rate of US dollar to RMB was 6.6805 yuan / dollar, up 2.73% compared with the beginning of the year, rising 7.47% compared with 2015.8.11.

The current depreciation of the renminbi is part of the revision of the overvalued value. The market generally assumes a continued devaluation of the market outlook. The view is that it will achieve 7 in the next two years.

Our country is textile.

Large countries, the US dollar is the main settlement currency of export enterprises, and the depreciation of the RMB exchange rate has a greater impact on export oriented enterprises.

Analysis of global textile and garment patterns: demand engine in the US, Europe and Japan, China is facing new textile country competition.

Examining the export pattern of the global textile and apparel industry, China's textile exports are scattered in developing countries, and clothing exports are concentrated in the US, Europe and Japan. Meanwhile, China is the largest source country of import and export in the US, Europe and Japan, but the market share is losing Vietnam, especially in the Japanese market.

It can be seen that the demand for global clothing imports mainly lies in developed countries such as the United States, Europe and Japan. On the one hand, China's clothing enterprises directly export clothing to developed countries. On the other hand, China's export of textile raw materials and finished products to newly emerging textile and garment countries such as Southeast Asia and West Africa, from their work to clothing and then exported to developed countries, become the main pattern of the global textile and garment industry.

China's clothing export is directly facing the competition of new garment countries, and has greater competition risk than textile industry. Textile exports can also benefit from the demand pull of emerging garment countries.

The influencing factors of China's textile and clothing exports: short-term global economic impact, long-term facing the world spinning center shift pressure

Since 2011, the growth rate of China's textile and clothing exports has been slowing down, and negative growth has been negative for the first time in 2015 (-4.87%), but the market share is still rising. In 2015, it reached 35.16%, maintaining the world's first place, far exceeding the second largest exporter of India (4.78% of the city).

Although our country

Export growth has slowed down, but the proportion is still rising, and the compound growth rate is higher than the global average level. This indicates that the slowdown in export growth in recent years is due to the systemic risk of the global economic slowdown. It is foreseeable that in the near future, if the economy recovers, it will be expected to drive the growth of China's textile and clothing exports. At the same time, we should also face up to the rising labor costs and the rise of new textile and garment countries in China. In the long run, the export of Chinese textile clothing is faced with the trend of the world textile center, and the export competitiveness will decline.

The depreciation of RMB will enhance the performance elasticity of textile and export enterprises in the short term, enhance export competitiveness and pay more attention to the larger elasticity of business performance.

In the short term, the devaluation of RMB will affect the performance of enterprises through the following ways: 1) foreign currency income will be converted into local currency, and the depreciation of domestic currency will lead to income growth; 2) the adjustment of foreign currency assets to the exchange rate gains and losses in the local currency at the end of the term; 3) hedging, overseas production layout, import of raw materials and equipment and equipment will weaken the impact of depreciation on performance.

In the long term, the depreciation rate of RMB against the US dollar as at 2016.7.12 is higher than that of Vietnam shield, Bangladesh Taka, Indonesia ruble, India ruble and Kampuchea rier.

1) during the same period, the Vietnamese shield was devalued more than Bangladesh Taka. China's main competitor in Europe is Bangladesh, and its main competitor in the United States and Japan is Vietnam. Therefore, it will be more competitive in Europe than in the United States and Japan.

2) these countries are also the main destinations of China's textile exports. The weakening of their downstream garment export competitiveness will inhibit the demand for Chinese textiles. Meanwhile, the depreciation of the RMB will be pmitted to Southeast Asian countries through textile exports, and enhance their profit margins and export price reduction capabilities, thereby reducing the impact of RMB devaluation.

At the company level, the higher the proportion of export earnings and the lower the proportion of import cost, the greater the exposure of exchange rate risk and the greater the degree of corporate benefit. We have made a detailed calculation of the performance elasticity of RMB appreciation, and have simulated the situation of different exchange rates.

According to the global macroeconomic situation and world textile

In the light of the results of the calculation of the performance elasticity of RMB depreciation and the valuation level of stocks, it is suggested that we should pay attention to Lutai A, Luen Fat share, Huafu color spinning, urge stock and Jonsson group.