Luthai Textile Co., Ltd. (hereinafter referred to as "Luthai A"), a global high-end yarn-dyed fabric manufacturer and an international first-line brand shirt manufacturer, said on June 23 that since 2021, with the epidemic under control, the market has recovered. Gradually improving, the company's order situation has gradually improved, and at the same time, due to multiple rounds of price hikes for main raw materials, the company has increased product prices accordingly.

This evening, entrusted by Luthai A, the relevant report issued by Lianhe Credit Rating Co., Ltd. (hereinafter referred to as "Lianhe Credit") shows that in the first quarter of 2022, Luthai A achieved a total operating income of 1.58 billion yuan, a year-on-year increase of 59.05% , mainly due to the increase in the price and sales of fabric products; the company's gross profit margin has increased compared with 2021, mainly due to the increase in the price of fabric products and the reduction in the cost of single-piece processing fees due to increased production.

In 2021, with the growth of sales scale, the procurement volume of the main raw materials of Luthai A, cotton and raw yarn, will increase compared with the previous year; affected by the increase in cotton prices and changes in the procurement structure, the company's average cotton procurement price will increase; due to the company's new In the color-enhancing yarn workshop, the external collection of colored yarn has decreased.

In 2021, the cost of raw materials is the main source of production costs for Luthai A. The raw materials purchased by Luthai A include cotton, raw yarn, dyed yarn and yarn. Specifically, in 2021, with the increase in the company's fabric product orders, the company's cotton purchases will increase. At the same time, due to the increase in cotton prices and the increase in the company's long-staple cotton purchases, the average purchase price of cotton will increase; The increase in yarn purchases was mainly due to the year-on-year increase in the company's fabric orders, and the increase in the average purchase price, mainly due to the increase in cotton prices; the company's dyed yarn purchases decreased, mainly due to the company's new color spinning workshop, Due to the increase of self-produced dyed yarns, the average purchase price of dyed yarns has increased, which is mainly due to the higher average price of externally picked dyed yarns except for the self-produced parts.

In 2021, with the growth of sales scale, the procurement volume of the main raw materials of Luthai A, cotton and raw yarn, will increase compared with the previous year; affected by the increase in cotton prices and changes in the procurement structure, the company's average cotton procurement price will increase; due to the company's new In the color-enhancing yarn workshop, the external collection of colored yarn has decreased.

Guosen Securities analyst Ding Shijie previously said that the main raw materials of Lu Thai A are cotton (about 70%) and yarn (about 30%), and cotton prices have started to rise since June 2020. Take 328 cotton as an example, in 2020 The average price in the second half of the year was 12,120 yuan / ton, and in the second half of 2020 was 13,404 yuan / ton. In 2021, the price continued to rise, especially in the second half of the year. The average price in the first half and the second half was 15,759 yuan / ton and 19,863 yuan / ton, respectively. Year-on-year growth of 30%/48%, respectively. Generally speaking, after the price of raw materials rises, it is possible to negotiate with downstream garment factories and brands to increase the order price. However, since the fabric order is about 2 months and the shirt order is about 4 months, the price of the order that has already been negotiated cannot be increased. At this time, if the price of purchased raw materials continues to rise, the cost pressure will be borne by the company. Due to the suspension of production in Vietnam in the third quarter and the increase in cotton prices in the second half of the year, the gross profit margins in the third and fourth quarters of 2021 reached 21% and 24%, respectively, which have improved quarter by quarter, but have not returned to normal levels.

Ding Shijie believes that in 2022, many unfavorable factors will gradually subside. In the first quarter of 2022, Lu Thai A achieved a year-on-year growth of 114% in performance and a gross profit margin of 24.4%. Both the month-on-month and year-on-year improvements have improved significantly, but it is 29~30% away from the pre-epidemic level. There is still a big gap. According to observation, due to the sharp rise in cotton prices in the second half of 2021, the company has conducted multiple rounds of order price negotiation with customers, and price transmission is gradually reflected. In addition, at the beginning of this year, the price of 328 cotton hit an inflection point. In the first quarter of 2022, it continued to stabilize at around 22,700 yuan / ton, and began to decline in April. It is currently around 22,500 yuan / ton. It is expected that the company's cost pressure is expected to be better relieved.

According to public information, as a global leader in mid-to-high-end yarn-dyed fabrics, Luthai A is currently a global high-end yarn-dyed fabric manufacturer and an international first-line brand shirt manufacturer, with a complete industry from spinning, dyeing, weaving, finishing to garment manufacturing. Chain, the leading products are yarn-dyed fabrics and shirts for shirts. Before the epidemic, more than 70% of the company's products were exported, and the market covered more than 30 countries and regions, including Japan, South Korea, the United States, the United Kingdom, and Italy. Weaving production base. In addition, the company has established 17 subsidiaries and more than 40 production plants in 8 countries including China, the United States, Italy, Japan, and Vietnam, realizing the three-point coordinated development of "domestic headquarters + design in Europe, America and Japan + production in Southeast Asia". layout.

With strong fabric development strength, continuous innovation ability and efficient supply chain management level, Lutai A has successfully entered Armani, Burberry, GUCCI and other international luxury brands, high-end men's clothing Hugoboss, the world's top shirt brands OLYMP, PINK, international fast fashion giant Uniqlo , American fashion brand CK and other internationally renowned brands in the supply chain, and established long-term strategic partnerships with Burberry, Oxford, Armani, Gucci, Uniqlo, etc.

As of today's publication of the first textile network, Lu Thai A closed at 7.04 yuan per share, down 0.56%, with a market value of 6.251 billion yuan.