What are the potential risks in the development of the textile and apparel industry?

(1) The risk of a macroeconomic downturn. The continued economic downturn will affect terminal consumption. If terminal consumption continues to be sluggish, it will have a great impact on the entire clothing consumption. Once the downstream sales channels are not smooth, the entire industry will be affected.

(2) The risk of exchange rate fluctuations. If the RMB exchange rate appreciates sharply, it will affect the competitiveness of domestic textile companies. At a stage where the industry has matured and operations have stabilized, changes in the external operating environment have a great impact on the industry and the company.

(3) The risk of rising labor costs. Textile and clothing is a labor-intensive industry, and it is difficult to fully realize mechanized and intelligent production in the short term. If the domestic labor cost rises sharply, it will have an adverse impact on the industry.

(4) The risk of substantial fluctuations in raw material prices. If the price of raw materials in the textile and apparel industry fluctuates sharply, it may cause certain disturbances to the normal production and operation activities of the industry, or affect the gross profit margin of product sales, or affect the efficiency of production and sales operations.

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