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Status quo of China’s home textile industry,Jan.-Oct.,2018

From January to Octoberthe above-designated home textile enterprises achieved a total profit of 13.16 billion yuana year-on-year increase of 4.9% and a profit margin of 5.48%. The total profit slightly slowed down from the same period of the previous yearrepresenting a decrease of 3.67% over the first nine months and a decrease of 2.36% from the same period of the previous year. The reasons for the slowdown in profit growth are as follows

From January to October last yearthe above-designated home textile enterprises realized a total main business cost of 210.89 billion yuanan increase of 7.84% year on year. The growth rate has been consistent with that of main business revenue. The ratio of industry’s main business cost to main business revenue was 87.7%2.2 percentage points higher than that of the industrial enterprises above designated size in the country. From the recent changes in the ratio of the main business costs of the industry to those of the main business revenuethe proportion has been consistently higher than the average level of industrial enterprises above designated size in China. The high costs have limited the profit margins of home textile enterprises.

During the first ten months of last yearthe operating expensesadministrative expenses and financial expenses of home textile enterprises above designated size increased by 15.02%9.94% and 16.68% respectivelyall higher than the growth of main business revenue. Since the beginning of 2017the growth rate of such expenses has been further expandedwhich was also reflected in various sub-sectors. The industry’s original profit margins are further squeezed.

In the futureon the one handit is a must to focus on improving business management capabilities and reasonable cost control to increase revenue. On the other handenterprises themselves are also required to pay attention to improving the added value of products and promoting enterprise restructuring and upgrading in order to explore and expand new profit margins.


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Email: candy@szbtrade.com

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