Clothing Industry: Strong Domestic Demand And Policy Boost 3 Shares Recommended

Europe and the United States are still the center of China's textile trade. For 08 years, exports to the United States are not smooth: the economic downturn of major trading countries, the existence of various trade barriers, and the continued appreciation of the renminbi make the domestic textile and clothing exports undergo severe tests.

Although China's exports to Europe and the United States and other countries grow rapidly, the export focus of textile and clothing is still in the European, American and Japanese markets. The growth of trade exports in the 08 year will largely depend on the growth of the EU region.

The impact of RMB appreciation depends on the bargaining power of enterprises and the repayment period: the impact of RMB appreciation on export oriented enterprises can not be generalized, and the extent of the impact depends on bargaining power and repayment period.

Cashmere industry and Shandong are willing to shift the risk of RMB appreciation by raising prices.

The domestic textile industry has entered the adjustment. The increase of Engel coefficient has led to oversupply: the export of textile and clothing is not smooth, and enterprises are fighting for the domestic market.

But in the past 07 years, due to the increase of grain and oil non-staple food prices, the Engel coefficient of the urban households has increased, and the clothing consumption level of the residents has decreased. In the 07 years, the trend of oversupply in the clothing market began to appear. In the 08 years, this situation is expected to make a big impact on the small and medium-sized enterprises.

The industry environment is not good, but the impact on the listed companies with brands and channels will not be too great (such as wedding birds, seven wolves, etc.).

The operating conditions of Enterprises above designated size are not too bad. Brand channels constitute market competitiveness: the loss of low cost advantage leads to the survival crisis of SMEs, and the industry is in the adjustment stage.

Although the textile and garment enterprises above designated size are also affected by the environment, their operation is in good condition. These enterprises will have greater expansion opportunities in the industry adjustment.

Garment enterprises above Designated Size, especially listed companies, now rely mainly on brands and channels to form competitiveness in the market.

The four driving force will ensure that textile and apparel will grow more than 20% in the next 5 years. Under the four driving forces of domestic economic growth, urbanization, the increase of farmers' consumption level and the "demographic dividend", coupled with the domestic textile and garment personalized demand and industry plight to promote industrial upgrading, the domestic textile and clothing consumer market will maintain more than 20% growth rate in the next 5 years.

There will be a market guarantee for the growth of companies with domestic brands and channels.

The support policy of the country in the future may enable superior enterprises to get more opportunities for development: in view of the severe situation of domestic cotton spinning industry, the supporting policies that the State Council is considering are: restoring export tax rebates, cancelling or reducing the margin of processing trade tax, and tax exemption of imported equipment.

If the preferential policies continue to be introduced in July, the gross profit will be 18 billion 500 million yuan in the whole industry, accounting for about 16% of the total profits of Enterprises above the textile scale in 2007.

Companies directly benefiting from the policy include: Lu Tai, Shandong Ruyi, Zhongyin velvet industry, and other companies indirectly benefiting from Xun Xing and Weixing.

Textile clothing investment should grasp the main line of brand, channel and policy: domestic clothing consumption is mainly domestic brand, and international brand is not the mainstream.

Therefore, we should invest in those listed companies that vigorously build brands, develop channels and grow.

In addition, the companies that will benefit after the support policies are also worth paying attention to.

According to these, the companies that are worthy of attention and investment are: good news birds, seven wolves, Shandong Ruyi, Xun Xing shares, Weixing shares, and China silver cashmere industry.

1, textile and clothing exports are being tested.

The economic downturn of the major trading nations, the existence of various trade barriers and the continued appreciation of the renminbi make the domestic textile and clothing exports undergo severe tests.

Although China's exports to Europe and the United States and other countries grow rapidly, most of them are textile intermediate products such as yarns and semi finished fabrics.

The export focus of textiles and clothing is still in the European, American and Japanese markets.

1.1. entered 08 years of export of textiles and clothing

The main trading countries of textiles and clothing -- the slowdown in US economic growth, coupled with the appreciation of the renminbi, the increase of raw materials and labor costs, have made the domestic textile and apparel lose the low price advantage in the international market. Since the entry into the 08 years, the export of domestic textiles and garments has been out of order.

In February, the volume of textile and clothing exports declined, and the export volume decreased by 15.13% and 2.60% compared with the same period last year.

In the four traditional markets of the export of textile and clothing, the EU, the United States, Japan and Hongkong, in addition to the EU's growth of 19.84% (the price growth of 11.39%, the growth of 7.59%), the United States dropped 7.79% (of which the price increases 6.75%, the number has dropped to -13.62%).

Although there was a retaliatory growth in textile and clothing exports in March (a growth rate of 45.7%), the growth rate slowed down in April compared with April (4 and May only 9.57%, 8.18%), and the growth rate of clothing was still not increasing (4, May growth was only 1.65%, -0.7%).

Overall, from 08 to 1, May, domestic clothing exports were US $37 billion 643 million, an increase of 7.03% over the same period in 07 years, and textile exports of US $26 billion 685 million, an increase of 24.65% over the same period in the same period of 07 years.

The growth rate of clothing exports has declined considerably compared with previous years, mainly due to the loss of the US economy and the loss of low cost.

1.2. the influence of us, EU and Japan's foreign trade environment on China's exports

Although there are many textile trade in China, the United States, the European Union and Japan have always been the main trading countries of China's textiles and clothing.

In the 07 year, China exported 3 of its total exports to the 3 regions of the United States, the European Union and Japan.

As shown in Figure 2.

Although Hongkong accounts for a larger share, most of Hongkong is entrepot trade, which is very different from the US, EU and Japan's own consumption.

Therefore, we pay special attention to the impact of the economic environment of the US, EU and Japan on China's textile and clothing exports.

In addition, from the average price of garments exported to the United States and the European Union in recent years, the price of clothing exported to the EU has gradually increased, while the average unit price of clothing exported to the United States is showing a downward trend.

As shown in Figure 3.

China is also an importer of textiles and clothing in the EU. In 08, 1-2, 40% of the EU's imports of clothing and 31% of its textile products are Chinese products (e.g. charts 6, 7).

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