Negative Factors Will Be Superimposed On &Nbsp; About 10% Increase In The Export Of Spun Garments.

Processing and manufacturing: rebound beyond expectations, but it is hard to say optimistic. 2010 1-5 Industry export Year-on-year growth of lg%, the international advantages and external demand stabilized to promote rebound than expected. But the fourth quarter, rising costs, European crisis, currency appreciation and other negative factors will superimpose, the industry revenue and earnings growth pressure is obvious. We estimate that the export growth rate in 2010 will be around 10%.

　　 Brand retail The spanformation is speeding up and the growth is strong. In the 1-5 month of 2010, retail sales increased by 23% over the same period, and the adverse factors such as bad weather and rising costs did not change its growth trend. We judged that the growth rate in 2010 would be higher than 20%. The opening of domestic consumption and the outbreak of the overseas economic crisis accelerated the spanformation of the industry from "processing" to "brand retailing", and the key links of the industry chain -- design, production, brand and channel are in the process of spanformation.

Home textiles topic: Xiao He only reveals a sharp corner. It is estimated that the capacity of the domestic textile industry is only about 118 billion yuan, and the scale is still small. Although real estate adjustment affects domestic textile demand, updating demand and wedding consumption have cushioned its growth rate. It is estimated that if the residential sales area falls by less than 20%, the growth rate of home textile consumption will still be above I0%. Industry concentration needs to be improved, and future competition will intensify.

Industry rating. 2010 first half year Industry export The rebound has been achieved on schedule, but there are more negative factors in the later period. While domestic sales are facing unfavorable factors, the growth is still strong and the long-term prospects are broad. In view of this, we downgraded the processing and manufacturing sector to "neutral", and continued to maintain the brand retail sector's "stronger than big city" rating.

Risk warning: the impact of the European debt crisis has further expanded, and the cost of raw materials and labor has risen further.

Investment strategy: at present, the brand retail sector PE 32 times in 2010, and the continuous growth of performance will be the premise of its valuation improvement. It is recommended that we grasp the two categories of "clear performance growth" and "operational turning point". The former focuses on seven wolves and good news birds. The latter suggests paying attention to the United States costumes and Saturday, processing and manufacturing sectors in 2010, PE 23 times, export pressure and cost increase and other negative factors will affect valuations.