Textile And Clothing Consumption Season Supports Fundamentals Of Outstanding Enterprises

Industry profits picked up significantly, and profitability in the medium term increased significantly.

Benefiting from the domestic economic recovery, the overall profitability of the textile and garment industry in the mid term has increased significantly. The 27 Sample Firms's operating income and net profit have increased by 36.88% and 27.84% respectively, and the gross profit margin has increased by 3.53 percentage points on average.

Among them, the net profit of brand retail industry in China's textile industry increased by 45% over the same period last year, and the net profit of the textile industry in the manufacturing industry increased by 66% year-on-year.

Export growth will slow down, and manufacturing enterprises can hardly be optimistic.

At present, faced with unfavorable factors such as slowing export growth, pressure on RMB appreciation, rising raw material prices and rising labor costs, it is expected that the profit margins and profit growth rate of manufacturing enterprises in the fourth quarter will decline and overall investment opportunities will be smaller to maintain the "holding" rating of the sub sector.

A few superior manufacturing enterprises with scale and brand effect have a certain cost pfer ability.

We recommend that we focus on the excellent enterprises that are pioneering and enterprising, highly developed and valued, including Weixing share, Huafu color spinning and Luen Fat share.

The trend of domestic retail growth is clear, and enterprises with brand and channel advantages will continue to maintain high growth.

In the first 8 months of this year, the total retail sales of domestic consumer goods increased by 18.2% over the same period last year, with the total retail sales of textiles and clothing above the quota increasing by 23.7% over the same period last year.

With mild inflation showing and domestic residents' income level, purchasing power and consumption will continue to improve, it is expected that the total retail sales of clothing will continue to maintain a high growth rate of about 20%.

At present, most textile and garment retail enterprises in China are in the joint strengthening stage of channels and brands. Brands enhance the ability of channel negotiation, expand channels and increase market share and brand awareness. We believe that enterprises with brand and channel advantages will continue to maintain high growth.

Investment advice and risk warning:

The fourth quarter is the peak season for textile and clothing consumption. The four quarter retail sales growth is expected to reach 25%.

The sub industry recommends attention to home textiles, brand clothing, outdoor products and women's shoes. It is recommended to pay attention to companies with basic support, profitability and income elasticity. It is recommended to pay attention to Luo Lai home textiles, fuanna, seven wolves, wedding birds, Meng Jie home textiles, American bond clothing, Pathfinder, and Saturday.

The main risk is domestic economic slowdown, raw material prices skyrocketing and plummeting, and RMB appreciation brings exchange rate risk.