Xinxiang Chemical Fiber: marginal profit of spandex industry gradually improves

Recently, Xinxiang Chemical Fiber disclosed the record form of investor relations activities, which was attended by Chairman Shao Changjin, General Manager Ji Yudong, Independent Director Wulong, Financial Officer Feng Liping, Board Secretary Fu Yuxia, and securities representative Tong Xin.

Q: what are the prospects for the demand recovery and future prosperity of the spandex fiber industry?

A: Dear investors, since 2023, with the gradual recovery of the supply and demand environment of the spandex industry, product prices have gradually warmed up, and demand will return to the right track. The company is firmly optimistic about the prospect of spandex industry, first, the downstream applications of spandex continue to expand, such as clothing, sanitary materials, etc.; second, spandex products have its unique elasticity and constantly rich differentiated functions, and there are still no other high-quality substitutes in the foreseeable future; third, the concentration of spandex industry is gradually increasing, and the development trend of industry competition towards oligopoly and differentiation becomes clearer. Thank you for your attention.

Q: would you please explain the reasons for the decline in revenue and the loss of net profit?

A: Dear investors, the decline in the company's performance in 2022 was affected by factors such as the gradual release of new capacity in the spandex industry and weak consumption growth on downstream market, resulting in a decline in the company's business performance compared with the same period of last year. Since the third quarter of 2022, with the gradual reduction of the inventory pressure, the rapid decline of the price of raw materials, and the gradual recovery of market demand, the price difference between spandex and the main raw materials gradually expanded compared with June 2022. The marginal profit of spandex industry gradually improved. Looking forward to 2023, due to the introduction of a series of policies and measures to stimulate consumption and encourage the expansion of domestic demand, the recovery of the textile and clothing market is good. It is expected that the demand for spandex will gradually return to normalization, and the trend of restorative development of the spandex market is obvious. Recently, the spandex market price has gradually rebounded. Thank you for your attention.

Q: do the management of company have the confidence to turn losses into profits this year and the company's business target for 2023?

A: Dear investors, the company will take a series of measures to improve the profitability of the company's products, including: 1. In terms of product types, the company will achieve fast, flexible and low-cost flexible production according to downstream demand changes, and improve product profitability. 2. In the sales mode, the company will increase the support of direct sales customers, enhance the communication with terminal brand customers, improve the stickiness of the use of their products, and expand the brand influence of the company. 3. In terms of the scope of product application, the company will promote the expanded application of products in plain cloth, and high needle, high density, woven ultra-thin fabrics, improve the product differentiation rate, improve the technical exchange and cooperation between the company and the terminal product brand, and heighten the added value of the product.
 

The company's business plan in 2023: annual production of cellulose filament 70,000 tons, annual production of spandex fiber 160,000 tons; annual sales income of about 7.3 billion yuan, period expenses of about 600 million yuan. (The above business plan does not represent the company's profit forecast for 2023. Whether it can be realized depends on many factors, such as the change of market conditions and the efforts of the management team. There is a great deal of uncertainty. Please pay special attention to it.)  Thank you for your attention.