Domestic listed knitting companies have recently released their performance reports for the third quarter of 2021. Judging from the overall performance situation, the third quarterly report continued the positive trend of the semi-annual report. The reporter sorted out the performance of 7 leading companies, and 3 of them still maintained the rapid growth of revenue and profits in the first two quarters, and their performance increased. Things will get better quickly and steadily.
Peak sales season boosts performance
The third quarterly report of 2021 shows that many well-known knitting companies have performed very well, showing substantial growth, ranging from 44.5% to 4.54%.
Jiansheng Group achieved operating income of 610 million yuan, a year-on-year increase of 44.5%; net profit attributable to the parent company was 72.9526 million yuan, a year-on-year increase of 2163.62%.
The leading joint-stock company achieved operating income of approximately 888 million yuan, a year-on-year increase of 8.85%. The net profit attributable to the parent company was approximately 7.34 million yuan, a year-on-year increase of 140.87%.
Langsha Co., Ltd. achieved operating income of approximately 107 million yuan, a year-on-year increase of 25.73%. The net profit attributable to the parent company was approximately 7.44 million yuan, a year-on-year increase of 40.5%.
Bangjie Co., Ltd. achieved operating income of approximately 191 million yuan, a year-on-year increase of 4.54%. The net profit attributable to the parent company was approximately 17.27 million yuan, a year-on-year decrease of 20.44%.
Taken together, leading companies in the knitting industry have innate competitive advantages in terms of global business layout, technology research and development, product quality, brand and customer resources, and their performance growth rate is firmly at the forefront of the industry.
Specifically, in the third quarter of this year, listed knitting companies such as Jiansheng Group, Longtou Co., Ltd., and Langsha Co., Ltd. have experienced substantial growth in both revenue and net profit. This is mainly because their main business has entered the traditional peak sales season, orders have increased significantly, and The order price has increased significantly, and the sales volume and price of cotton socks products of Jiansheng Group have doubled.
The 2021 semi-annual report shows that the main businesses of Longtou Co., Ltd. are import and export business, textile and knitting industry, domestic trade, textile and apparel industry, and textile and home textile industry. The proportion of revenue in the industry is 45.9%, 40.56%, 8.09%, 5.21%, and 5.21%, respectively. 3.13%.
Langsha Co., Ltd.’s profit increased by more than 40.5% year-on-year, mainly due to the company entering the peak sales season in the second half of the year, seasonal sales strengthened, and customer orders increased, driving product sales to further increase.
The main business of Bangjie Co., Ltd. is the design, research and development, production and marketing of seamless clothing. It mainly provides customers with seamless clothing development, design and production and manufacturing services in the ODM/OEM model. The main reason for the decline in the net profit attributable to the parent company of Bangjie Co., Ltd. was due to changes in the profit structure. As the production costs of the seamless garment industry continue to increase and domestic and foreign market competition becomes more intense, the company’s main business is facing a decline in market share, resulting in changes in net profit attributable to the parent company.
Repeated epidemics have led to a slowdown in growth
Against the backdrop of slowing domestic economic growth, the financial reports for the third quarter of this year were both good and worrying. The revenue of some listed knitting companies was not as good as expected. In the current period, the revenue of listed companies such as Semir Apparel, Aimer, and Anaier experienced year-on-year declines. From the perspective of net profit, the net profits attributed to the parent companies such as Aimer and Anair have dropped significantly.
The financial report shows that in the first three quarters of this year, Semir Apparel achieved operating income of 10.021 billion yuan, a year-on-year increase of 6.04%; net profit attributable to the parent company was 943 million yuan, a year-on-year increase of 336.64%. In the third quarter of 2021, the company achieved operating income of 3.504 billion yuan, a year-on-year decrease of 5.69%; net profit attributable to the parent company was 278 million yuan, a year-on-year increase of 42.85%. Taken together, the growth rate of Semir Apparel’s operating income has been slowing down quarter by quarter, with a decline in the third quarter.
In the first three quarters of this year, Aimer achieved operating income of approximately 2.467 billion yuan, a year-on-year increase of 5.6%; net profit was 259 million yuan, a year-on-year decrease of 15.47%. In the third quarter of 2021, the company achieved operating income of approximately 734 million yuan, a year-on-year decrease of 7.25%. The net profit attributable to the parent company was approximately 3.69 million yuan, a year-on-year decrease of 97.46%. Specifically, although Aimer shares have great advantages in market share and other aspects, the company’s development has encountered obstacles and its profit growth rate has been lower than expected.
In the first three quarters of this year, Anair achieved operating income of 814 million yuan, a year-on-year increase of 11.76%; net profit attributable to the parent company was 10.0053 million yuan, a year-on-year increase of 129.44%. The 2021 semi-annual report shows that the children’s clothing business accounts for 99.47% of Annaier’s total revenue. In the third quarter of 2021, the company achieved operating income of 193 million yuan, a year-on-year decrease of 18.56%; and a net profit loss attributable to the parent company of 35.4083 million yuan, a year-on-year decrease of 79.92%. Based on the results of the first three quarters of this year, Anair’s performance in both revenue and net profit growth is remarkable, but the double-digit revenue growth rate has slowed down significantly year-on-year.
Regarding the reasons for the slowdown in growth, industry insiders believe that since the third quarter of this year, the growth rate of the knitting consumer market has slowed down significantly, and knitted brand sales have shown a downward trend compared with the same period last year. There are two main reasons. First, there was retaliation in the same period last year. Consumption, so the sales rebound has a higher base year-on-year; secondly, in the third quarter of this year, there were recurring epidemics and natural disasters in some areas of the country, which had a negative impact on the industry’s terminal sales.
Regarding the slow recovery of performance, Semir Clothing said that first, operating income growthstagnated; second, sales expenses continued to rise, diluting profits. However, Semir Apparel is full of confidence in its performance in the fourth quarter and is actively stocking up for the peak season. The third quarter report shows that inventory has risen to 4.02 billion yuan, a year-on-year increase of 21.5%. Children’s clothing business has always been the engine driving the rapid growth of Semir apparel performance. In the first half of this year, after excluding the loss caused by the acquisition of the well-known French children’s clothing brand Sofiza (Sofiza) Group, Semir Clothing’s children’s clothing business only achieved low double-digit growth. Added to factors such as repeated epidemics, Semir Clothing’s performance downturn.
In the third quarter of this year, Aimer’s net profit attributable to its parent company dropped by as much as 97.46%. Aimer shares believe that the main reason for the decline in performance is that in the third quarter, terminal sales declined due to the impact of the new coronavirus epidemic, extreme weather and other factors in some areas; the company’s expenditure on brand building increased compared with the previous year, and sales decreased compared with the same period. The profit declined in stages; secondly, the company implemented a refined operation strategy, and during the reporting period, it concentrated on withdrawing a number of terminals that were not in line with the sustainable development of the brand, and its performance declined in stages along with the operation strategy.
Anair said that the reason for the decline in performance was mainly due to the high temperature in the third quarter, which reduced the demand for autumn and winter clothing. Floods and the epidemic in some areas caused the company’s offline sales to decline; the company increased its efforts to collect accounts receivable; prepayments during the period This is due to the impact of the supplier’s deposit for raw materials and processing fees for autumn and winter products; the formation of lease liabilities due to store and warehouse leasing.
The channel structure needs to be optimized and consolidated
Under the influence of many unfavorable factors such as rising raw material prices and repeated epidemics, the peak season is not prosperous and survival of the fittest has become the norm. However, under difficulties, there are always companies that can counter the trend by optimizing product structure, enhancing competitiveness, consolidating channels, and strong brands.
This year’s “Double 11”, Semir Clothing’s children’s clothing brand Balabala once again won the top spot in children’s clothing sales, demonstrating the brand’s strong resilience and stamina in the online market. Semir Clothing was founded in 1996. After becoming popular in a single category, it expanded into multiple categories and established the Balabala children’s clothing brand in 2002 to meet the multi-dimensional needs of maternal and infant users. At present, Semir Apparel mainly maintains the brand’s appeal to young consumer groups by launching co-branded models with popular IPs. The Balabala brand advocates “different childhood” and hopes that children can grow up “unfettered”. Focusing on providing children with personalized, interesting and colorful products and experiences, this also laid the foundation for itself to explore new revenue paths.
Consumers are willing to pay for quality and appearance. Anair said that in the first three quarters of this year, Anair’s R&D investment continued to increase, and product design and quality were significantly improved. In addition, the company’s financial report also shows that Anair achieved significant results in cost reduction and efficiency improvement in the third quarter. In terms of brand building, the company continued to improve online channel construction during the reporting period, actively developed e-commerce business, and upgraded the new retail operation centers of major online shopping platforms. At the same time, the company’s official mini program “Annil+” pushes brand promotions and co-branded new products in real time, allowing consumers to understand the company’s dynamics at the first time and shorten the distance between the company and consumers.
Currently, there are still many uncertainties in the overall market environment. How to reverse the “slow down” trend requires companies to think deeply. Many companies believe that in the long run, by tracing back to their roots, only by focusing on “stability”, with a clear main line of development, focusing on brand building, sorting out core products, optimizing channel structures, and gaining insights into consumer needs can they strengthen their brands.
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