Textile And Clothing: Watch Out For Shrinking Wealth To Reduce Domestic Demand For Clothing

In June 08, the textile and garment industry exported 15 billion 64 million US dollars, down 4.57% compared with the same period last year.

Among them, textile exports amounted to 57.54 US dollars, up 21.39% over the same period last year, and clothing exports were 9 billion 310 million US dollars, down 15.70% compared to the same period last year.

Industry exports showed negative growth for two consecutive months, and the rate of decline continued to increase.

The export tax rebate rate has been raised, and the tax rebate rate of some textiles and clothing has increased from 11% to 13%, and has been implemented since August 1st 08.

This is the policy choice between the two governments in terms of employment and industrial adjustment, but it is difficult to reverse the downward trend of exports.

In July 08, the total retail sales of domestic consumer goods increased by 23.3% year-on-year, and the growth rate reached a new high in 3 years.

Among them, clothing consumer goods grew by 26.8%, higher than the total retail sales of consumer goods by 3.5 percentage points.

But compared with the second half of 07 years, the difference between the two has obviously narrowed.

The boom in the clothing industry has dropped sharply.

In July, the PMI index of clothing manufacturing industry dropped to below 50 for the first time in 49, which is 15.7 percentage points different from the April high.

The new orders index was only 47.5, down 14 percentage points from last month, a decrease of 14.6 percentage points compared with the same period last year.

Due to concerns about the drop in clothing consumption at home and abroad, we lowered the rating of clothing manufacturing industry to "neutral".

For companies with high added value, strong profitability and brand and channel resources, they should give long-term attention.

　　1.行業(yè)出口下滑趨勢明顯

In June 08, exports of textiles and clothing were US $15 billion 64 million, down 4.57% from the same period last year.

Among them, textile exports amounted to 57.54 US dollars, up 21.39% over the same period last year, and clothing exports were 9 billion 310 million US dollars, down 15.70% compared to the same period last year.

Garment industry exports have been negative growth for two consecutive months, and the decline has been increasing.

In the first half of 08 years, the total industry exported 79 billion 393 million US dollars, an increase of 9.69% over the same period last year, and the growth rate dropped 7.28 percentage points compared with the same period last year.

In the sub sectors, 15.7% of the export volume of clothing products is the lowest value since the entry of WTO (excluding the objective impact months).

The reasons for this situation are: first, the continued appreciation of RMB and the rising cost, resulting in the decline of international competitiveness of China's clothing products; two, the decline of clothing demand in the international market caused by the international economic recession; the three is the cardinal effect; in July 07, the export rebate rate of clothing products was reduced from 13% to 11%, and many enterprises had concentrated on exports before the end of June, resulting in an increase of 28.14% in the same month, which was the highest in 07 years.

In June, enterprises generally expected to increase their export tax rebates (export rebate rates have been raised in August 1st), and enterprises will try to postpone export contracts to enjoy the benefits of tax rebates.

Therefore, we judge that the growth rate of garment exports in July will remain at a low level, and will pick up in August.

    2.出口退稅率上調(diào)難以扭轉(zhuǎn)長期趨勢

The long-awaited export tax rebate rate policy has finally been promulgated, and the tax rebate rate for textiles and clothing has increased from 11% to 13%, and has been implemented since August 1st 08.

Static calculation of tax rebate will increase 08 years, 5 months after the whole industry pre tax profit of 7 billion 300 million yuan, improve the industry profit margin of about 0.6 percentage points.

Industry exports are expected to reverse short-term downward trend, but the long-term trend is still not optimistic.

First of all, from a dynamic point of view, because China's export enterprises do not have the advantage in bargaining power, foreign businessmen will take advantage of the price reduction, and the preferential tax rebates can not be fully enjoyed by domestic enterprises. Secondly, the main factors affecting China's exports, the costs continue to rise, the appreciation of the renminbi is still continuing, the main trading partners' economy is also in a downward cycle, only by raising the tax rebate of 2 percentage points to offset the bad profits; again, the tax rebate increase objectively saved a large number of vulnerable enterprises on the verge of bankruptcy, but also slowed down the pace of upgrading the industry.

　　3.警惕內(nèi)需增速下滑，調(diào)低服裝制造業(yè)評級至“中性”

In July 08, the total retail sales of domestic consumer goods grew by 23.3% over the same period, and the growth rate reached a new high in 3 years.

Among them, the growth rate of clothing consumer goods was 26.8%, still higher than the total retail sales of consumer goods by 3.5 percentage points.

But compared with the second half of 07 years, the difference between the two has obviously narrowed.

The boom in the clothing industry has also dropped sharply.

PMI of garment manufacturing industry in July (Purchasing Managers Index of manufacturing industry)

Index 49, fell below 50 for the first time, a difference of 15.7 percentage points from the high point in April.

The new orders index was only 47.5, down 14 percentage points, down 14.6 percentage points from the same period last year.

Although the clothing consumption in the first half of the year has maintained a relatively high growth rate, we believe that the slowdown in economic growth, the decline in property income generated by the decline in share prices and property prices and the shrinking of wealth effects will gradually affect the consumption of clothing in the second half of 08 years to 09 years. As a leading indicator of consumption, the new industry order index has dropped sharply in recent years, which also confirms our judgement.

Due to concerns about the decline in clothing demand at home and abroad, we have shifted the rating of clothing manufacturing to "neutral".

For companies with high added value, strong profitability and brand and channel resources, they should give long-term attention.

　　4.重點公司推薦

4.1 Weixing shares (13.50, -0.15, -1.10%, bar) (002003): resist the downturn in the industry and continue to grow.

Sales revenue in the first half of the year was 623 million yuan, and net profit was 50 million 610 thousand yuan, up 31.83% and 68.87% respectively.

The main reason for the sharp increase in net profit is the tax exemption for domestic equipment and the reduction of the income tax rate.

In the first half of 08 years, although the garment industry encountered many difficulties for many years, the company's orders were full, sales revenue of buttons, zippers and crystal drills increased by 43%, 25% and 68%, respectively, for three kinds of products.

In the first half of the year, the company consolidated gross profit margin was 29.06%, down 0.71 percentage points from the same period last year.

Mainly due to the sharp drop in gross profit of crystal drill and optical lens, the gross profit margin of buttons and zippers of main products steadily increased. In the first half of the year, accounts receivable turnover rate increased from 3.04 in the same period last year to 3.33, inventory turnover increased from 1.73 to 1.80, and business efficiency increased; at the end of 6, the mobile ratio and speed increased.