In 2020, the COVID-19 pandemic continued to spread, accelerating the changes in the global landscape. China's dyeing and finishing industry experienced fluctuating development, withstanding complex and severe challenges. Despite the severe impact of the pandemic, it achieved a difficult recovery, with the overall industry showing a trend of recovery and improvement. By the end of 2020, the capacity utilization rate of dyeing and finishing enterprises basically recovered to the same level as in 2019, but the operating and profit conditions of enterprises were still significantly lower than in the same period of 2019, and the industry still faces significant pressure in returning to pre-pandemic levels.
1. Steady Increase in Production Growth Rate
According to data from the National Bureau of Statistics, the output of dyed and finished fabrics by large-scale dyeing and finishing enterprises from January to December was 52.503 billion meters, a year-on-year decrease of 3.71%. The decrease in output narrowed by 3.50 percentage points compared to January to November, the largest narrowing since the fourth quarter.
In December, the output of dyed and finished fabrics reached 6.254 billion meters, a year-on-year increase of 16.98%, the highest monthly output in 2020. Since September, the monthly output of dyed and finished fabrics has shown positive growth for four consecutive months, indicating that the industry's production has accelerated its recovery since the fourth quarter.
2. Continued Improvement in Operational Quality, but Relatively Slow Recovery Progress
According to data from the National Bureau of Statistics, from January to December, the three expenses ratio of large-scale dyeing and finishing enterprises was 6.97%, an increase of 0.28 percentage points year-on-year, of which cotton dyeing enterprises were 6.70% and chemical fiber dyeing enterprises were 9.01%. The finished product turnover rate was 17.85 times/year, a decrease of 20.05% year-on-year; the accounts receivable turnover rate was 7.99 times/year, a decrease of 21.31% year-on-year; and the total asset turnover rate was 0.94 times/year, a decrease of 14.95% year-on-year.
Compared with January to November, the three expenses ratio of enterprises from January to December decreased by 0.02 percentage points; the decrease in the finished product turnover rate, accounts receivable turnover rate, and total asset turnover rate narrowed by 2.63, 2.76, and 1.34 percentage points respectively. Since the third quarter of 2020, with the continued improvement of the domestic epidemic prevention and control situation, the operational quality of the dyeing and finishing industry has been continuously improving. However, compared with the progress of production recovery, the gap between the main operational quality indicators in January-December 2020 and the same period in 2019 is still significant, and it will still take time for the industry to achieve a full recovery.
3. Continued Repair of Economic Benefits, but Profit Pressure Remains Prominent
Data from the National Bureau of Statistics show that from January to December, the main business income of large-scale dyeing and finishing enterprises was 254.132 billion yuan, a decrease of 12.15% year-on-year; the main business cost was 218.995 billion yuan, a decrease of 11.91% year-on-year, accounting for 86.17% of the main business income; the total profit was 12.668 billion yuan, a decrease of 19.01% year-on-year; the cost-expense profit margin was 5.35%, a decrease of 0.49 percentage points year-on-year; the sales profit margin was 4.98%, a decrease of 0.43 percentage points year-on-year; and the export delivery value was 34.591 billion yuan, a decrease of 16.83% year-on-year. Compared with January to November, the decrease in main business income and total profit from January to December narrowed by 1.88 and 3.90 percentage points respectively, the cost-expense profit margin and sales profit margin increased by 0.39 and 0.34 percentage points respectively, and the decrease in export delivery value narrowed by 1.11 percentage points.
From January to December, among 1,581 large-scale dyeing and finishing enterprises, 431 were loss-making enterprises, with a loss rate of 27.26%, an increase of 8.34 percentage points year-on-year, and a narrowing of 4.24 percentage points compared to January to November; the total losses of loss-making enterprises were 1.889 billion yuan, an increase of 15.82% year-on-year, and the growth rate narrowed by 18.79 percentage points compared to January to November.
After experiencing significant fluctuations in the first half of the year, the main economic indicators of dyeing and finishing enterprises showed a gradual recovery trend in the second half of the year, and the profitability of enterprises improved significantly compared with the first half of the year. However, the year-on-year decrease was still relatively large, and the upward trend of industry profitability needs to be further consolidated.
Currently, the global pandemic has not yet fundamentally eased, the uncertainty of the external environment remains high, and the foundation for industrial recovery is not yet solid. Coupled with difficulties and problems such as increased comprehensive industry costs, arduous environmental protection tasks, and intensified market competition, the industry faces many challenges in maintaining stable operation. However, at the same time, China, as the only major economy in the world to achieve positive growth in 2020, has shown strong economic resilience, which provides strong support for the continued recovery of the dyeing and finishing industry. In 2021, under the background of the accelerated construction of the new development pattern of "dual circulation" with domestic large circulation as the mainstay, relying on China's largest and most complete textile industry system in the world, the dyeing and finishing industry has the foundation and conditions for steady economic operation and improvement.
