Excellent Export And Domestic Sales&Nbsp; Great Opportunities For Textile Weaving

May spin The clothing export data strengthened the market's confidence in the recovery of the textile industry, while the domestic market also continued to grow, which confirmed the growth trend of the textile and clothing industry in the year. Even if the overall market of the plate is not obvious, it is expected that textile stocks with good performance will still have good investment opportunities.

The export situation continues to improve

In May this year, China's textile and clothing industry exported 16.432 billion US dollars, up 33.53% year on year. From January to May, the industry's exports totaled USD 131.76 billion, up 19.3% year on year, 3.6 percentage points higher than that from January to April. After the seasonal shock in the first quarter, the cumulative export growth rate of textiles and clothing has continued to rise for two consecutive months. After the data was released, the textile sector also emerged from a relatively strong market.

EU is China spin The largest export market of clothing, accounting for more than 20%. From the beginning of the year to June 25, the depreciation rate of the euro against the RMB has reached 14.73%, which has a negative impact on China's textile exports to the euro area, but the impact is limited. Because the devaluation of the euro against the RMB is mainly due to the devaluation of the euro rather than the appreciation of the RMB, there is little possibility that the euro zone countries will transfer orders to other countries.

At present, the European and American economies are at risk of a second dip, but the employment rate indicator is stabilizing and showing signs of improvement. The employment rate will improve, the consumption demand will gradually rise, and the clothing demand will be dominated by the growth of rigid demand, which will also guarantee the export orders of domestic textile and clothing enterprises in the future.

Exchange reform has limited impact on large enterprises

Recently, the reform of the RMB exchange rate has been put on the agenda, and it is expected that there will be a slight appreciation within the year. For the textile industry, the appreciation of RMB has a greater impact on small and medium-sized enterprises, while it has a relatively small impact on large enterprises with stable customers and bargaining power. At present, 80% of domestic textile and clothing exports are settled in US dollars, and the appreciation of RMB will have a serious impact on domestic textile and clothing exports. If the appreciation rate is too large, the export profits of most OEM SMEs will be significantly diluted, or even lost, affecting the enthusiasm of enterprises for export.

Large enterprises have long-term stable customer base. After RMB appreciation, enterprises can generally reach agreements with customers to reduce the impact of RMB appreciation. If large enterprises try to promote new products, it will make up for the impact of the appreciation of the RMB, and even concentrate production orders to large enterprises.

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Domestic sales spin Main growth drivers

This year's strong demand for textiles and clothing is due to the growth of exports of nearly 20%, and more importantly, the growth rate of domestic sales of more than 25%. The growth rate of domestic clothing consumption has exceeded that of exports since 2007, and has maintained a growth rate of more than 20% since then. With the improvement of the income level of domestic residents and the acceleration of urbanization, the growth momentum of domestic textile and clothing sales will continue in the next few years. In the context of the unclear trend of foreign economy and the strengthened expectation of RMB appreciation, the growth of domestic sales will become the main driving force for the development of China's textile and clothing industry.

Light industry and heavy individual stock

Since it is difficult to see overall investment opportunities in the market at present, we suggest focusing on Fuanna, Luolai Home Textile and Dayang Chuangshi according to the business model, industry status and market trend of individual shares.

1. Fuanna is a well-known medium and high-end brand home textile enterprise in China. 97.41% of its operating revenue comes from the domestic market. As of May this year, there were 1338 terminal stores. The company plans to add 180 brand direct stores in the next two years, and also plans to add 300~400 franchise stores every year, while vigorously developing the second brand Xinerle. The gross profit rate in the first quarter of this year was 46.66%, 3.67 percentage points higher than that in 2009. It is expected that the company's interim net profit will be about 47.8 million yuan, up 42% year on year.

2. Luolai Home Textile Co., Ltd. ranks first in the market share in the home textile industry, and has a relatively complete industrial chain structure. 98.01% of its income comes from the domestic market. Due to the large profit margin space of direct marketing, the company has increased the construction of direct marketing channels in recent years, preferring to adopt the direct marketing model in central cities, and adopt franchise around central cities. In the process of developing new markets, the number of direct marketing stores will be increased, and the proportion of direct marketing sales in total sales will be increased. After the completion of the R&D center, the R&D strength of the company will be further enhanced, the added value of products will be improved and new products will be launched continuously, which will not only bring about the growth of sales revenue, but also increase the gross profit margin.

3. Dayang Chuangshi's business is mainly foreign trade. At present, the gross profit margin of foreign trade is only about 20%, while the gross profit margin of independent brand Chuangshi and Kaimen is 40%~50% and 30%~40% respectively. In order to reduce the impact of weak export, the company developed low-end brand network direct sales business and single volume single cutting business, and transformed from export to domestic market, so as to change the excessive dependence on foreign markets, reduce the impact of future RMB appreciation on the company's operation, and enable the company to enter a new growth stage.