China cellulose fiber companies report strong revenue growth in 2021

In 2021, market participants generally had high expectation for economic recovery with the alleviation of panic over the COVID-19 pandemic. China as the country with the fastest recovery of supply chain in the world benefited a lot. Compared with 2020, the operating conditions of most cellulose fiber enterprises have improved significantly, according to the annual reports disclosed by Chinese listed companies.

Aoyang Health Industry: Funing Aoyang Technology Co., Ltd, a subsidiary that operates the chemical fiber sector, has a revenue of 1.048 billion yuan and a net profit of -1.068 billion yuan (-420 million in 2020). The huge losses are mainly caused by asset impairment losses, asset disposal losses and disposal costs of related employees. In terms of operating data, the annual output is 85,386 tons, a year-on-year decrease of 36.26%. The sales volume is 89,965 tons, a year-on-year decrease of 36.84%. The inventory is 500 tons, a year-on-year decrease of 90.67%. The significant year-on-year decrease in production, sales and inventory is mainly due to the company's divestiture of viscose business. On Apr 9, 2021, the company announced that it planned to sell viscose business, and the counterparty is Sateri China Investment Co., Ltd. The proposal was approved by the general meeting of shareholders on Jul 23. After that, Aoyang Health Industry will focus on the big health business.

Jilin Chemical Fiber: the disclosure of the annual report was previously delayed by the impact of COVID-19. The company's main business is viscose filament yarn and viscose staple fiber. During the reporting period, the company transformed to carbon fiber. According to the operating data, the revenue of viscose filament yarn is 2.206 billion yuan, an increase of 29.7% year-on-year, and the revenue of viscose staple fiber is 1.197 billion yuan, an increase of 72.52% year-on-year. The production and sales of viscose filament yarn is 67,259 tons and 70,723 tons respectively, and the production and sales of viscose staple fiber is 106,052 tons and 103,797 tons respectively.

Nanjing Chemical Fiber: the company shut down the viscose filament yarn line in 2018. At present, the main cellulose products are viscose staple fiber and lyocell, but the latter has not yet been produced or sold during the reporting period. Among the operating data, the sales volume of viscose filament yarn is 897.37 tons. During the reporting period, all the inventory of viscose filament yarn has been sold, with a revenue of 18.11 million yuan, a year-on-year increase of 92.84%. The output and sales volume of viscose staple fiber is respectively 33.6kt and 30.8kt, with a revenue of 328 million yuan, a year-on-year increase of 24.56%.

Sanyou Chemical: the output and sales of viscose staple fiber is 681.7kt and 668.4kt respectively, compared with 749.6kt and 761kt in 2020. The revenue of viscose staple fiber is 8.284 billion yuan, a year-on-year increase of 21.03%, and the net profit is 270 million yuan (-124 million yuan in the same period last year).

Xinxiang Chemical Fiber: the company currently focuses on the production and sales of viscose filament yarn and spandex, and has suspended the production of viscose staple fiber. During the reporting period, the company produces 64,374 tons of viscose filament yarn, a year-on-year increase of 3,587 tons. The revenue totals 2.045 billion yuan, a year-on-year decrease of 6.49%.

Zhongtai Chemical: the output and sales of viscose fiber is 569.9kt and 267.4kt respectively, and the output and sales of rayon yarn is 297.5kt and 300.3kt respectively. The revenue of the two is 2.881 billion yuan and 4.199 billion yuan respectively, a year-on-year increase of 80.7% and 34.34% respectively.

We can see that all companies (except for Aoyang Health Industry due to the divestiture of the business) sees significant growth in fiber-related revenue in 2021, and the profit mostly improves.