Shock! The cotton spinning raw material giant with a revenue of 6.6 billion in the textile sector last year was included in the entity list by the United States

Xinjiang Zhongtai Chemical Co., Ltd. (hereinafter referred to as "Zhongtai Chemical") (June 11) announced in the evening that on June 10, 2023, the company learned that the U.S. Department of Homeland Security listed the company in the "Uyghur Forced Labor Prevention Act". " on the Entity List. The company's main products are polyvinyl chloride resin, ionic membrane caustic soda, viscose fiber and viscose yarn. In 2022, it will achieve an operating income of 55.911 billion yuan, of which domestic income accounts for 93.37% and export income accounts for 6.63%. The entity list will not have a major impact on the company's production and operation. At present, the company is comprehensively assessing the potential impact of this incident on the company, and will actively communicate with relevant departments to deal with it. First Textile Network learned here that the so-called "Uyghur Forced Labor Prevention Act" (Uyghur Forced Labor Prevention Act, hereinafter referred to as UFLPA) in the United States will come into effect on June 21, 2022. On June 17, the US Department of Homeland Security issued the "Prevention of Import China’s Strategies for Goods Mined, Produced, and Manufactured Through Forced Labor” and the UFLPA Entity List. On June 13, the U.S. Customs and Border Protection issued the "Operation Guidelines for Importers". The China Council for the Promotion of International Trade believes that the U.S. government has fabricated the so-called "forced labor" problem in Xinjiang out of thin air, seriously disrupting Xinjiang's economic development and foreign trade, and unreasonably increasing the burden on enterprises.

The main content of the UFLPA strategy includes the following aspects: first, a comprehensive assessment of the risks of goods imported from China that are mined, produced or manufactured using forced labor; second, the assessment and explanation of the so-called forced labor and the UFLPA entity list; third, about Initiatives, tools, and technical recommendations for identifying and tracking goods; Fourth, the US Customs and Border Protection’s plan to strengthen law enforcement; Fifth, explaining the resource protection needed to ensure that goods made by so-called forced labor do not enter the United States; Six is a guide for importers; Seven It is a program of coordination and cooperation with NGOs and other agencies.

According to public information, Zhongtai Chemical was established in 2001 (formerly the Xinjiang Caustic Soda Plant established in 1958), and it is an advantageous resource conversion enterprise mainly supported by the Xinjiang Uygur Autonomous Region. In 2006, Zhongtai Chemical was listed on the Shenzhen Stock Exchange. Relying on the abundant natural resources such as coal, raw salt, and limestone in Xinjiang, the company has developed into a dominant enterprise with two main industries of chlor-alkali chemical industry and viscose textile industry through continuous optimization of management concepts and improvement of the industrial ecosystem. The main business is polyvinyl chloride resin (PVC), ionic membrane caustic soda, viscose fiber, viscose yarn four major products, supporting thermoelectricity, semi-coke, calcium carbide, calcium carbide slag cement, cotton pulp and other circular economy industrial chains.

The industrial layout of the Sino-Thai textile sector is located in Dangala and Katlon in Tajikistan abroad, and in Korla, Alar, Shaya and other places in Xinjiang in China. The company has 1.5 million mu of high-standard cotton fields, 70,000 mu of cotton breeding base, 1 million tons of viscose fiber, 400,000 tons of pulp, 3.85 million spindles of viscose yarn, 960,000 spindles of cotton yarn, 140,000 tons of non-woven fabrics, 9,500 The production scale of 10,000 meters of woven fabrics, 16,000 tons of woven fabrics, and 4.5 million pieces (sets) of customized clothing. More than 40,000 people are directly employed. Build the largest single-scale leading enterprise in the cotton industry, the world's largest viscose yarn production base, China's largest viscose production base and a group of high-tech enterprises, establish cotton planting, viscose production, high-end spinning and downstream weaving, printing and dyeing , clothing processing as one of the whole industry chain development model.

In terms of viscose and textiles, the viscose fiber of Zhongtai Chemical is mainly exported to Brazil, India, Turkey and other countries, and the export will account for 2.63% in 2022. Viscose yarn is mainly exported to Singapore, India, Malaysia, Turkey, Brazil and other countries, with exports accounting for 7.43% in 2022.

Compared with other viscose companies in the mainland, Zhongtai Chemical has certain advantages in the main raw materials such as pulp and caustic soda, energy supply, electricity cost and steam cost required for the production process. At present, the production scale of viscose fiber is at a relatively high level in the industry. With the withdrawal of outdated production capacity in the viscose industry and the readjustment of the supply-demand relationship, the scale advantages and cost advantages brought about by the integration of the company's industrial chain will become more obvious. In the past two years, under the influence of industrial policies such as "Xinjiang Textile and Garment Industry Development Plan (2018-2023)", "2018 Action Plan for Developing Textile and Garment Industry in the Autonomous Region to Drive Employment", and "Made in China 2025 Xinjiang Action Plan", the textile industry has become Xinjiang's strategic industries, viscose fiber and viscose yarn products will still have a broad market space in Xinjiang in the future.

The financial report shows that in 2022, Zhongtai Chemical achieved operating income of 55.911 billion yuan, a year-on-year decrease of 11.1% (after adjustment); the net profit attributable to the parent company was 714 million yuan, a year-on-year decrease of 74.02% (after adjustment); basic earnings per share were 0.2772 It is proposed to distribute a cash dividend of 1 yuan (including tax) to all shareholders for every 10 shares.

In terms of sectors, the textile sector contributed 6.623 billion yuan in operating income to Zhongtai Chemical, accounting for 11.85% of the company's operating income, a decrease of 6.46% compared with the same period last year.

In terms of products, viscose fiber contributed 2.705 billion yuan in operating income to Zhongtai Chemical, accounting for 4.84% of the company's operating income, a decrease of 6.10% compared with the same period last year; viscose yarn contributed 3.666 billion in operating income to Zhongtai Chemical Yuan, accounting for 6.56% of the company's operating income, a decrease of 12.69% compared with the same period last year. Other textile products contributed 250 million yuan to Zhongtai Chemical's operating income, accounting for 0.45% of the company's operating income.

As of the last trading day before the press release of the first textile network this evening, Zhongtai Chemical closed at 6.70 yuan per share, a decrease of 1.47%, with a market value of 17.353 billion yuan. Source: First Textile Network