I. Discussion and analysis of operating conditions
In the first half of 2020, the COVID-19 epidemic swept the world and became more and more serious. The global macroeconomic situation has undergone profound changes, the demand for production and consumption has been restrained, international trade frictions have intensified, Sino-US relations have deteriorated, and the uncertainty and instability of the economic situation have increased significantly. With the major strategic achievements in domestic epidemic prevention and control, the resumption of work, production and business has been promoted efficiently, the domestic demand market has gradually picked up, and the domestic economy has shown a steady and positive trend.
Facing the complex external environment, the downstream demand, especially the international market demand, has shrunk seriously. Under the leadership of the board of directors, the management and all employees of the company, on the one hand, do a good job in epidemic prevention and control, on the other hand, promote the resumption of work and production, and make every effort to reduce the adverse impact of the epidemic on the company. Continue to focus on the company's development strategy and business objectives, adhere to the corporate purpose of "based on a high starting point, using high technology, developing cutting-edge technology and creating high efficiency", carry forward the entrepreneurial spirit of "Qi Xin works together, dares to fight hard, breaks the routine and is never satisfied", and actively respond to various difficulties and challenges.
The main work during the reporting period: make preparations for epidemic prevention and control in time, actively carry out epidemic prevention and control, and do a good job of control after employees return to the factory to ensure the smooth resumption of work; The management and business departments of the company actively communicate with customers to overcome difficulties, and at the same time adjust sales strategies and policies in a timely manner in the face of the current complex and changeable market; Continue to strengthen quality control in accordance with the requirements of implementing high-quality development; Further strengthen production site management, continuously improve production efficiency and save production costs; Absorb all kinds of high-level talents, strengthen personnel training, and improve the professional ability and comprehensive quality of employees.
In order to actively respond to the national "One Belt, One Road" policy and implement the company's globalization strategy, the company invested in the Ethiopian wool textile dyeing project on 20 16, and established a wholly-owned subsidiary, Sunshine Ethiopian wool textile dyeing Co., Ltd., which was officially put into production in the first half of this year. However, due to foreign epidemics and other reasons, the production and operation have been affected to some extent. At the same time, this kind of overseas investment may also encounter risks brought by foreign politics, policies, exchange rate, security situation and local legal, cultural and commercial environment.
During the reporting period, the company achieved operating income of 792 million yuan, down 26.90% year-on-year; Operating profit-9.37 million yuan, down112.63% year-on-year; The net profit attributable to the owners of the parent company was-32 million yuan, down 18 1.07% year-on-year. The decline in profits during the reporting period was mainly due to the epidemic situation and the economic situation at home and abroad, which had a great impact on the sales side, and the decrease in orders led to a decline in profits.
The textile business achieved an operating income of 506 million yuan, down by 3.3 14% compared with the same period of last year, an operating cost of 4170,000 yuan, down by 3 1.62% compared with the same period of last year, and a gross profit margin of 17.54%, down by1. Regionally, domestic sales revenue was 343 million yuan, down 23.49% compared with the same period of last year, and export sales revenue was 654.38+63 million yuan, down 47. 18% compared with the same period of last year.
Thermoelectric business realized operating income of 264 million yuan, down by 12.96% compared with the same period of last year, operating cost of 206 million yuan, down by10/0% compared with the same period of last year, and gross profit margin of 2 1.8 1%, down by 2.48 percentage points compared with the same period of last year.
Second, possible risks
(1) Macroeconomic fluctuation risk
Macroeconomic uncertainty has increased. The downstream textile and garment market demand of the company is affected by macro-economy and import and export policies. Due to the overall sluggish environment, slow global economic recovery, Sino-US trade friction and the COVID-19 epidemic in 2020, it may have a certain negative impact on the company's operation.
(2) the risk of rising raw material prices
The main raw material of textile industry is wool, and the main raw material of thermoelectric industry is coal. Affected by the domestic and international economic situation, changes in market supply and demand and other factors, the future prices of the company's main raw materials are uncertain. Therefore, the increase in wool and coal prices will directly affect the company's production costs and increase the company's operating risks.
(3) the risk of rising labor prices
The company is a labor-intensive industry, and the increase in labor costs in recent years will have an adverse impact on the company's profit growth; The company improved the automation rate of product production process by introducing intelligent equipment, and set up factories abroad, which reduced the production cost.
(4) Risk of overseas operation
The company set up a company in Ethiopia. The differences in legal environment, economic policy, market situation, culture, language, customs and habits at home and abroad have brought certain difficulties to company management. At the same time, changes in the local economic situation and related economic policies may adversely affect the company's future operations.
(5) The company may also face financial risks such as exchange rate changes and interest rate changes (see "Related Risks of Financial Instruments (II) in Sections 11 and 10" for details), as well as risks that may arise from policy changes.
The company will maintain a high degree of vigilance, actively respond to all kinds of unpredictable risks that may come from the outside, and reduce the adverse impact on the company's production and operation.
Three. Analysis of core competitiveness during the reporting period
During the reporting period, the company's main core competitiveness has not changed significantly compared with the previous year.
Since its establishment, the company has always adhered to the development strategy of "based on a high starting point, using high technology, developing cutting-edge technology and creating high efficiency". The company has strong scientific research strength and advanced equipment level, and has obvious technical advantages in the textile industry. We provide high-end woolen fabrics to major clothing enterprises at home and abroad every year, and we are a long-term supplier of high-end brand clothing in the world. The company is a well-known worsted fabric production enterprise and thin fabric production base in China, a leading enterprise in the domestic wool textile industry and a major exporter of domestic wool textile enterprises. Over the years, the company has focused on worsted fabrics and led the high-end field of the industry with its core expertise in industrial textiles. At present, the company and several other enterprises occupy the high-end product market of wool textile. In recent years, the company has continuously entered the top enterprises in China wool knitting industry 10, the top 500 enterprises in China textile and garment industry and the top 50 enterprises in China textile and garment industry.
In terms of product innovation, the company adheres to the product research and development and technological innovation concepts of "no one has me, no one has me, no one has me, no one has me" and "one step ahead, no one can beat me", strengthens research and development strength, increases R&D investment, speeds up research and development, continuously maintains product and technical advantages, and realizes the leading product innovation capability of the global textile industry.
The company has passed ISO900 1 quality management system certification, ISO 1400 1 environmental management system certification, IS04500 1 occupational health and safety management system certification, and SA8000 social responsibility management system certification. The company pays attention to product research and development, and has established national technical center, national wool spinning new material engineering technology research center and Jiangsu industrial design center. , improve the technological innovation system. The company * * * undertakes four national 863 programs, four national science and technology support programs 1, two national key R&D projects, six national torch program projects 1, 26 national key new products, seven national key technological innovation projects and one national innovation capability project1. The company's leading product worsted fabric has successively won 4 excellent products, 20 provincial excellent products, 3 national new products and 15 provincial new products. The company won the second prize of China Textile Industry Federation Science and Technology Progress Award, the third prize of China Textile Industry Federation Science and Technology Progress Award, the China Textile Industry Patent Excellence Award, the second prize of Jiangsu Science and Technology Award, the third prize of Jiangsu Science and Technology Award, and the Jiangsu Textile Technology Innovation Award.