RMB Depreciation Promotes Export Gross Profit Growth Of Textile Enterprises

RMB appreciation

With the rising cost of raw materials, the competitiveness of China's textile and garment industry in the world's main markets has been weakening in recent years, and the main market share in Europe and the United States has been declining.

But in the process of RMB devaluation, the performance of China's textile and garment export enterprises began to recover and increase slightly.

Insiders pointed out that the depreciation rate of RMB against the US dollar is 1%, and the sales profit margin of the textile and garment industry will increase by 2% to 6%.

Moreover, the scale of China's textile and garment industry ranks first in the world, and the impact of exchange rate changes on the industry is huge.

The sudden sharp depreciation of the RMB, for the average profit margin of less than 10% of the textile and garment industry companies, the role of self-evident performance boost.

According to statistics compiled by reporters, flush statistics show that there are 56 textile and apparel businesses with export business.

In the 33 companies, the gross profit margin of foreign businesses rose year by year, and the gross margin of foreign business of 23 companies decreased year by year.

Among them, in 2015, the gross profit margin of the company in 2015 was 4% year-on-year.

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Industry related companies told reporters that devaluation sometimes does not mean that the company's performance will turn better. Some customers will ask for a reduction in the price of clothing while the renminbi depreciated, so that enterprises can not make money.

While sorting out the flush statistics, the reporters found that the gross profit margin of foreign businesses in San Fang Lane in 2015 dropped by 10.61% compared with the same period last year, while the foreign main business income of the company also dropped by 16.82% over the same period last year.

In addition, the gross margin of foreign business in 2015, such as San Mao Pai Shen, Hongda hi tech, Huafu color spinning, Jinying share, cross border pass, Lu Tai A and Jiaxin silk company, all appeared to be about 9% to 2%.

Whether the gross margin of foreign businesses increased or declined, most of the export oriented textile and garment companies realized profits after the depreciation of the RMB in the first half of 2016.

According to the flush statistics, most of the listed companies mainly exporting textile and garment products in the first half of 2016 predicted that the performance of the newspaper will increase by a different margin.

In addition, the relevant export enterprises worthy of mentioning should pay attention to the relevant laws and regulations of the United States on textile and apparel accessories and the latest requirements, strictly control the quality of raw materials, and constantly improve the production process and testing methods, so as to ensure that textile and clothing products exported to the United States are not notified or recalled for quality and safety issues.