Inside a factory of Century fibre Joint Stock Company (STK). Demand for textile and garment industry products will increase in the last quarter of this year to serve year-end festivals. (Photo: STK) In the first half of this year, the business results have shownsigns of improvement as the prices of raw materials - cotton - decreasedsignificantly compared to the first half of 2022. Demand from the Chinesemarket has also rebounded.
Revenue in H1 of Damsan Joint Stock Company (ADS) increased by14.1% compared to the same period in 2022. In the second quarter of this yearalone, revenue and net profit of this business increased 66.7% and 13.4% overthe same period in 2022, and up by 129% and 89% compared to the first quarterof 2023, respectively.
Polyester yarn manufacturers have seen gradually recoveringdemand. In the second quarter of 2023, Century Fibre Joint Stock Company's(STK) revenue increased by 41.5% compared to the first quarter of 2023 and netprofit increased 22 times compared to the first quarter.
VNDIRECT Research said that the export value of Vietnam's textileand garment products had improved over the months since May 2023, an earlysignal for the recovery of demand for textile products.
Fibre industry enterprises - the upstream segment of the textileand garment industry value chain - were expected to be the first segment toshow recovery, said VNDIRECT.
Demand for textile and garment industry products would increase inthe last quarter of this year to serve year-end festivals, so export activitiesof fibre enterprises were expected to be more vibrant from the third quarter of2023.
In the first half of 2023, Damsan’s yarn and towel export outputto the Chinese and Japanese markets reached about 5,600 tonnes, an increase of2.6 times compared to the second half of 2022.
Damsan Textile said the current order volume was sufficient untilthe end of Q3 of 2023. Meanwhile, the export revenue of Century Fibre JointStock Company (STK) increased by 53% in the first 6 months of this year,compared with a 52% increase in 2022.
VNDIRECT Research said that domestic fibre enterprises werecurrently waiting for a turning point from the prospect of consumption in China- Vietnam's largest fibre importer.
Vietnam's fibre export turnover to China in the first half of thisyear only reached 1.04 billion USD, down 20.7% over the same period in 2022.However, in the second quarter of 2023 alone, export turnover reached 610.7million USD, up 42% compared to the first quarter of 2023 and slightlyincreased compared to the second quarter of 2022.
Retail sales of textiles and footwear as of May in China increasedby 2.3% compared to April, and increased by 12.3% compared to May 2022,reaching 107,6 billion yuan.
The People's Bank of China has continuously cut lending interestrates recently to promote production and consumption activities, as well as reducesavings interest rates to stimulate cash flow into consumption and investment.
Therefore, VNDIRECT Research expects that the demand for fibreproducts in the Chinese market will show clearer signs of recovery in thefourth quarter of 2023 - first quarter of 2024. Yarn manufacturers with a highproportion of exports to China, such as Damsan Textile, are expected to benefitgreatly from this trend.
Regarding the business prospect of Damsan Joint Stock Company, theoperation of An Ninh Yarn Factory in the second quarter of 2023 has helped thisbusiness enter the top 5 largest yarn and towel manufacturers in the country.The company currently owns three factories with a total designed capacity of14,000 tonnes per year for CD32 yarn and 3,000 tonnes per year for towels.
Century Fibre Joint Stock Company, Unitex Fibre Factory phase 1 isexpected to operate commercially in the first quarter of 2024, helping toincrease the total capacity of the company to 96,000 tonnes per year. It isexpected that when Unitex Factory is completed in 2025, the company will becomethe second largest yarn producer in the country./.
VNA
