Bright outlook for textile industry but investors should still be cautious
- 150
- Business
- 11:02 05/04/2022
DNHN - The textile and garment industry is forecast to have a bright prospect in 2022, but as share prices have increased sharply since 2021, many stocks may not continue to rise significantly.
The textile and garment industry is forecast to have a bright prospect in 2022, but as share prices have increased sharply since 2021, many stocks may not continue to rise significantly.
As a result, analysts say investors should only prioritise enterprises with good fundamental growth.
At the end of 2021, US President Joe Biden signed a law banning the import of cotton materials produced in Xinjian, China into the US. US Customs and Border Protection estimated that about 9 billion USD of cotton products were imported from China in 2021.
This can be seen as a great opportunity for Vietnamese cotton yarn companies such as Vietnam National Textile and Garment Group (VGT), Damsan Joint Stock Company (ADS), and Phong Phu Corporation (PPH) among others.
It is similar to what happened in Europe in March 2021, when a series of major international fashion brands such as Nike, H&M, Uniqlo, and Zara announced they would stop using cotton materials from Xinjiang.
China's share of textile and yarn exports to Europe fell from 52.4 percent in 2020 to 44.7 percent in 2021.
Vietnam became the EU's sixth-largest non-regional textile supplier in 2021, accounting for 3 percent in value.
According to the European Textile and Apparel Federation (Euratex), the EU textile industry witnessed a strong recovery after COVID-19. Specifically, the value of textile and garment output had increased back to pre-pandemic levels by the end of November 2021.
Meanwhile, the International Monetary Fund (IMF) and the World Bank (WB) forecast global GDP growth to reach 4.9 percent in 2022, and world textile demand in 2022 will return to 2019 levels, reaching about 740 billion USD.
The recovery of the world textile and garment industry will also help Vietnam’s export turnover to complete the plan set out in 2022, at 43 billion USD, an increase of 4 billion USD compared to the figure of 39 billion USD in 2021.
Large textile companies such as Garment 10 Corporation JSC (M10), Century Yarn JSC (STK), Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM) have all had enough orders until the second quarter of and the third quarter of this year.
Despite facing many difficulties in the third quarter due to the tight distancing policy amid COVID-19, 2021 will be a successful year for textile and garment enterprises.
According to estimates of VNDirect Securities (VND), total revenue in the fourth quarter of 2021 of listed textile companies increased by 24.1 percent thanks to the recovery of textile companies in the south. After the end of the lockdown, most southern companies were running at 85-90 percent capacity, compared with 50-60 percent capacity in the third quarter.
Thanks to the fourth-quarter results, total revenue in 2021 of listed textile companies increased slightly by 7.6 percent while net profit increased by 57.4 percent. Companies recording impressive profit growth in 2021 include DamSan Joint Stock Company (ADS), up 303 percent, Vietnam National Textile & Garment Group (VGT), up 161.4 percent, and Century Synthetic Fiber Corporation (STK), up 93 percent.
Business results in 2021 showed division among businesses in different regions. Northern garment companies such as Song Hong Garment Joint Stock Company (MSH), TNG Investment and Trading Joint Stock Company (TNG) have high-profit growths in 2021, both with an increase of more than 90 percent.
The reason was that these enterprises had improved their product portfolio, increasing free on board (FOB) orders.
Garment companies in the south saw lower profit growth because their factories only operated at 50-60 percent of capacity during the time of social distancing.
Among them, Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM) and Viet Tien Garment Corporation (VGG) were the two listed companies that recorded negative profit growth in 2021, down 48 percent and 41 percent, respectively.
According to statistics, the textile and garment stock group has achieved impressive growth since the beginning of 2021, reaching between 48-291 percent.
Vietnam National Textile & Garment Group (VGT) up 153 percent, Song Hong Garment Joint Stock Company (MSH), up 126 percent, Century Synthetic Fiber Corporation (STK) up 178 percent, TNG Investment and Trading Joint Stock Company (TNG) up 116 percent, DamSan Joint Stock Company (ADS) up 291 percent.
For this reason, analysts recommend that investors be cautious when investing in textile and garment stocks at present. According to VNDirect Securities Co (VND), although the textile and garment industry is expected to have a bright prospect in 2022, investors need to invest selectively because most of the industry's shares are no longer cheap. Investors should only prioritise enterprises with plans of factory capacity expansion in 2022-2025.
DamSan Joint Stock Company (ADS), Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM), and TNG Investment and Trading Joint Stock Company (TNG) have expanded their business further to the segments of real estate and industrial park real estate. It is expected that the new business segments will help these businesses maintain profit growth in the period 2022-2025.
Source VNA
Related news
- Are Vietnamese firms overlooking their most valuable “gold mine”?
- Iran Conflict and the “Double Shock” to the Global and Vietnamese Economies
- After 8 years and trillions sent abroad, are uST investors caught in a risky no-exit situation?
- When Cryptocurrency leaves the "Grey Zone": How are Vietnamese investors seeking profits?
- When the tech unicorn dream is undermined by reckless fundraising structures
- From New Year messages of World Leaders to the “new rules” of the Global economy in 2026
- Connecting Leaders, Shaping the Future: Strategic Leadership Planning Meeting – CorporateConnections Hanoi A
- Sunlight - Unilever Vietnam Recognized for Outstanding Contributions to the National Initiative Supporting Women Entrepreneurs
- Deputy Prime Minister Nguyễn Chí Dũng: “The country’s major challenges weigh heavily on my mind — and we must resolve them together.
- Unitsky String Technologies signs cooperation agreements with three Vietnamese partners, opening a new direction for smart mobility and sustainable development
- When artists do business – livelihood is no poetry!
- Before the D‑day to abolish flat‑rate tax: Fear of technology and costs leave small traders struggling to adapt
- Vietnamese enterprises at a crossroads: the impact of a potential US–China deal
- "Digital technicians" must not be forgotten if Vietnam aims to meet its strategic goals
- HDBank: Impressive profit growth, leading in profitability and advancing international integration
- TNI King Coffee sued for over VND 5 Billion in unpaid debts
- VINASME and Jeonnam Technopark Sign MOU on technology cooperation, human resource training, and trade promotion
- Vietnamese entrepreneurs strengthen ASEAN connectivity in the digital iIntegration era
- Vietnam upgraded to Secondary Emerging Market by FTSE Russell
- Hanoi’s economy grows 7.92% in first nine months of 2025, FDI surges nearly threefold
Đọc thêm Business
What truly defines corporate value in a rapidly evolving digital era?
In the digital age, corporate value is no longer confined to tangible assets but increasingly resides in brand equity, data, and knowledge - intangible assets that ultimately determine competitive strength.
Are Vietnamese firms overlooking their most valuable “gold mine”?
In the digital economy, corporate value no longer primarily resides in factories or machinery. A growing body of research highlights a fundamental shift in how value is created.
Iran Conflict and the “Double Shock” to the Global and Vietnamese Economies
The outbreak of conflict in Iran since late February 2026 is sending significant shockwaves through the global economy.
After 8 years and trillions sent abroad, are uST investors caught in a risky no-exit situation?
The article “When the Tech Unicorn Dream Is Undermined by Careless Capital-Raising Funds” pointed out legal risks and financial structural issues in the fundraising model related to the uST ecosystem.
When Cryptocurrency leaves the "Grey Zone": How are Vietnamese investors seeking profits?
From a market operating in the "grey zone," cryptocurrency in Vietnam is entering a phase of reshaping as a series of Government orientations, decrees, resolutions related to digital assets, financial security.
When the tech unicorn dream is undermined by reckless fundraising structures
A green transport technology project in Belarus, thousands of kilometers from Vietnam has continued to attract capital from a significant number of Vietnamese investors.
From New Year messages of World Leaders to the “new rules” of the Global economy in 2026
At a pivotal moment of transition, New Year messages from capitals such as Hanoi, Beijing, Washington and Paris reflect distinct priorities and strategic visions.
Connecting Leaders, Shaping the Future: Strategic Leadership Planning Meeting – CorporateConnections Hanoi A
"Your network is your most powerful flowing asset. It generates value, multiplies opportunities, and accelerates your influence across borders."
Innovative ESG enterprise: Trạm Xe Việt startup proposes solutions to build a green mobility ecosystem
As Vietnam commits to achieving Net Zero by 2050 and tightens emissions standards, the transportation sector faces unprecedented pressure to transform.
Deputy Prime Minister Nguyễn Chí Dũng: “The country’s major challenges weigh heavily on my mind — and we must resolve them together.
On the morning of November 26, 2025, Deputy Prime Minister Nguyễn Chí Dũng chaired a high-level working session at the National Innovation Center (NIC) in Hòa Lạc.