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Textiles and stuff

Ngày cập nhật: 04-26-2017

Contrary to the great expectations a year ago on opportunities from the TPP and the FTAs, the textile industry is witnessing the greatest difficulties ever. Growth in the first six months was only 4.72%, the lowest growth rate in the textile and apparel industry in the last 10 years.

Contrary to the great expectations a year ago on opportunities from the TPP and the FTAs, the textile industry is witnessing the greatest difficulties ever. Growth in the first six months was only 4.72%, the lowest growth rate in the textile and apparel industry in the last 10 years.

According to the statistics of the Vietnam Textile and Apparel Association (Vitas), the total export turnover of Vietnam's textile and garment in the first six months of the year reached 12.67 billion US dollars, up 4.72% over the same period last year. last year, lower than the expected growth rate and only reached 41% of the annual export plan.

Gray paintings

In fact, the textile industry is facing a series of problems. Experts say that the three factors that make Vietnam's textile and apparel industry unable to compete with other countries are fixed exchange rates, minimum wages and bank lending.

Vietnam, with countries such as China, Bangladesh, Sri Lanka or Myanmar, devaluated significantly against the US dollar, making their export prices much cheaper. Meanwhile, increasing minimum wage and social security is a big challenge for businesses in the industry.

To take advantage of the opportunities offered by free trade agreements, businesses must invest in technology and equipment to improve productivity and reduce costs. But loans with high interest rates are a great barrier to the development of enterprises. The financial statement of the garment company listed on the Hanoi Stock Exchange in the first half of 2016 with turnover of nearly 2,000 billion VND in 2015 but still bear the interest rate of 10-10.5% is a proof.

In addition, Vietnamese textiles and garments are subject to US export tariffs ranging from 17-18%, to the EU from 8-12%. This is one of the reasons why Vietnamese goods are much more expensive than countries such as Cambodia, Myanmar and Laos.

Bright spots

Looking at the business results of the first six months of the listed companies, it can be seen that the number of enterprises is slowing down, the reason explained by the company is due to reduced orders and increased costs show color picture. the gray of the textile industry is really clear.

However, a small number of listed companies are showing some positive things in their business. Notably, traditional names such as May Viet Tien (Upcom: VGG), Gillimex (HOSE: GIL) or Gamex Saigon (GMS) have achieved business growth.

For the first 6 months of 2016, VGG's revenue reached VND3,514 billion, up 19.2% y / y, after-tax profit of its parent company was VND165 billion, up 5.1% y / y. Similarly, Sai Gon Garment Company still has a good result with total revenue of VND 702 billion in the first half of this year, up 7% over the same period of last year. Profit after tax of the parent company reached VND 50 billion , up 4.1%.

Impressed most is Gilimex with sales reached 731 billion, up 41.5% and profit increased 128% over the same period last year. In the simple explanation of GIL, the reason for the increase in revenue and profit is that GIL orders continue to increase.

In addition, the case of Thanh Cong Textile and Garment (HOSE: TCM) has significantly reduced profit compared to the same period of 2015 due to specific causes such as loss of factory relocation to Vinh Long, exchange rate increase causing debt in USD increased price and somewhat of Eland's dominance. But overall, TCM is still positive with sales up 13% y / y, of which export sales account for VND1,379 billion, accounting for 91% of the company's revenue structure.

What makes these businesses different?

Except for TCM, which is highly valued thanks to the production system from cotton to finished products, Eland covers more than 60% of its products. TCM's revenues are still growing and are expected to meet most of the criteria for tax benefits if FTAs ​​with TTP and FTAs ​​with Europe are approved.

As for Gilimex, this is a specific business, specialized in producing products with high technical level and value added such as bags, bags ... The main export markets are Europe and America. According to Gilimex's annual report, revenues from this sector account for 85% of total revenue in 2015.

At present, Binh Thanh factory is a cash generating machine of GIL. GIL's Board of Directors said that Binh Thanh will continue to focus on high value items and new product development centers. Another characteristic that makes Gilimex so strong is that they have no debt financing policy and only work with banks on the basis of orders and export sales.

Just like Gilimex, May Viet Tien is an enterprise that uses less debt to pay interest on the lowest loan. Meanwhile, despite the extensive distribution system, VGG's inventory is well managed. With a VGG inventory capacity factor of 9x, equivalent to 40 days of inventory, this shows that VGG's inventory management and sales capabilities are very high compared to its peers. again.

Textiles and stuff

Textiles and stuff

Textiles and stuff

Textiles and stuff

Textiles and stuff
Textiles and stuff
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