The performance of knitting listed companies picks up in the third and fourth quarters

Nov 30, 2020  |  by Zhao xh


The knitting industry rebounded in the third quarter. In this quarter, many companies’ revenues rose year-on-year, and their losses narrowed sharply. Even many knitting enterprises also made profits in a single quarter. From the perspective of industry insiders, with the drive of the “double circulation” strategy, the full restart of the industrial chain in the third quarter and the superposition of the autumn and winter sales seasons have allowed the knitting industry to gradually get out of the shadow of the pandemic. It is expected that in the fourth quarter, stimulated by online activities such as “Double 11”, the knitwear market will achieve steady growth in performance amid further recovery. At the same time, it is worth noting that the accelerated expansion of online channels by various knitting companies will also further intensify market competition. However, industry insiders also pointed out that from the fourth quarter of 2020 to 2021, the development of the knitting industry will still be full of challenges.
 
The performance of companies gradually improved in the third quarter
In the third quarter, the business of listed companies mainly engaged in knitted fabrics showed a trend of further recovery. Recently, Challenge Group’s financial report for the first three quarters of 2020 showed that the company achieved total operating income of 880 million yuan in the first three quarters, a year-on-year increase of 21.7%; net profit attributable to the parent company was 33.444 million yuan, compared with -19.127 million yuan in the same period last year. Turning losses into profit year-on-year, an increase of 274.85%.
 
On November 1, the financial report for the third quarter of 2020 of Anhui Huamao Group Co., Ltd. (referred to as “Huamao”) showed that the company achieved revenue of 2.437 billion yuan in the first three quarters of this year, a year-on-year increase of 16.26%; it achieved net profit attributable to the parent company 253 million yuan, down 8.31% year-on-year. But only in the third quarter, the company achieved a profit of 143 million yuan, an increase of 583.59% over the same period last year. Compared with previous years, the situation improved significantly in the third quarter.
 
In addition, as one of the domestic underwear giants, Embry Holdings Limited has not yet released its third-quarter results, but according to its latest third-quarter operating data, the company’s third-quarter performance growth has further rebounded. During the reporting period, the company achieved a year-on-year sales growth of 8%. It can be seen that Embry has returned to the level of the same period last year and will even increase.
 
In the third quarter, the performance of Cosmo Lady also recovered significantly. According to the performance report for the third quarter of 2020 released by Cosmo Lady recently, the company’s production and operation recovered steadily in the third quarter, and “new products + supply chain + online and offline retail” have been fully improved.
 
Judging from the current third-quarter performance of all companies, revenue has rebounded, but compared with previous years, there is still a certain gap. It is expected that the fourth-quarter performance will further recover with the arrival of traditional festivals and the gradual recovery of offline business.
 
In 2020, the COVID-19 pandemic spread globally. Challenge Group has seized the opportunity of high overseas demand for pandemic products and successfully opened up new markets for global personal health protection products, making the company further increasing its market share. In the second quarter, the company signed large orders for overseas pandemic prevention products. After making up for the loss in the first half of the year, the company achieved operating income of 282 million yuan in the third quarter, although it was 0.35 percent less than the same period last year, and realized a net profit loss of 9.101 million yuan, but compared with the same period last year, it still achieved a growth of 64.46 percent.
 
Challenge Group said that the newly added protective product business from January to September was an important reason for the company’s profit growth. This year, Challenge Group will continue to focus on the traditional competitive industries, namely the research and development of mid-to-high-end knitted weft-knitted functional fabrics and ready-made garments, and provide customers with services in the entire industry chain from weaving and dyeing to ready-made garments. On the other hand, the company actively explore new markets for health protection products. The company relies on existing medical qualifications, technology and production capacity to produce and sell isolation gowns and other related protective materials.
 
In the first half of 2020, under the impact of the COVID-19 pandemic and the severe test of increasing downward pressure on the economy, Huamao actively promoted the resumption of work and production. At the same time, talent and capital investment in key driving factors such as R&D, design, innovation, market, and service have gradually increased. Huamao’s main business is pure and blended yarns of cotton, wool, hemp, silk and man-made fibers and their fabrics, knitwear, clothing, dyeing and printing processing; textile equipment and accessories, home textile sales, etc.
 
Affected by the COVID-19 pandemic, as of the end of September this year, the number of retail outlets of Embry Holdings Limited has been reduced by 118 to 1,949, of which 1,743 and 206 are sales counters and specialty stores respectively. Embry Holdings Limited said that it is expected that the group will continue to clean up inefficient stores this year and adjust its sales network to improve overall operational efficiency.
 
Embry Holdings Limited was founded in Hong Kong, China in 1975, mainly engaged in women’s underwear products. After more than 30 years of operation, it has developed into a modern large-scale enterprise. During the first half of the year, the gross profit margin of Embry Holdings Limited fell by 6.73 percentage points year-on-year to 71.21%. To this end, the company launched a half-year transformation and self-help activities. Embry Holdings Limited said that she will strive to accelerate the pace of digitalization, reduce dependence on stores, and gradually increase the brand’s share in the online shopping market to balance online and offline sales.
 
With the improvement of the domestic pandemic situation in the second half of the year, Cosmo Lady’s revenue data continued to improve. In the third quarter, through close cooperation with various major platforms, including Alibaba (such as Rhino Intelligent Manufacturing), JD.com and Vip.com, it is expected that online sales in the fourth quarter will continue to grow.
 
The industry believes that multiple factors contributed to the third quarter performance. Among listed knitting companies, the trend of online and offline integrated development is more prominent. The growth of Cosmo Lady’s retail is not only driven by online channels, but also mainly attributable to the group’s all-round changes in brand, product, marketing, and channels.
 
 

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