Textile And Garment Export Growth Slowed Down Or Will Continue

In September, industry export data continued to grow since April, but the growth rate dropped.

Exports grew by 9.11 percentage points over the previous month.

We believe that the slowdown in industrial exports in September is mainly due to the following reasons:

(1)

The effect of regional replenishment is gradually decreasing.

The European Union will set a fiscal tightening schedule to reduce the fiscal deficit. The euro area's retail sales in August decreased by 0.4%. In September, the Manufacturing Purchasing Managers Index reached a new low in January.

Although economic growth is stable, the recovery of employment and credit market is slow, and consumer demand is restrained to some extent.

(2) rising export prices affect export volume.

Although raw material prices continued to rise in September (domestic grade 328 in September)

The price was 22 thousand and 600 yuan / ton, an increase of 75.49% over the same period last year, and the growth rate was 25.99%.

The price was 10 thousand and 600 yuan / ton, an increase of 21.33% over the same period, a year-on-year growth of 10.44%), the wage increase caused by the recruitment difficulties of enterprises, the increase of trade frictions and the increasing pressure of RMB appreciation, which made the prices of enterprises' exports increased. However, some enterprises with weaker bargaining power chose to break contracts and abandon orders under the pressure of rising costs, thus weakening the increase effect of export volume due to the increase of export prices.

We believe that the fourth quarter export growth will still operate in a downward path.

First,

Prices continue to rise (cotton prices are soaring due to factors such as reduced production, demand increase, cotton farmers reluctant to sell and speculation in idle funds), which will drive the prices of chemical fiber products to rise. This will weaken China's export advantage, increase export prices or reduce orders, increase export prices and increase the risk of order pfer, while less orders will directly reduce export volume.

Secondly, August.

and

The trade deficit has expanded significantly, reaching a record high.

The proportion of total trade deficit has also risen to 60%, which will increase the pressure of appreciation in the latter part of the renminbi.

In addition, the European fiscal tightening effect has gradually emerged in the second half of this year, which will inhibit the growth of domestic demand in Europe.

Finally, the foreign trade barriers are becoming increasingly harsh. The United States recently passed the "toxic substances control act" and "foreign producers' legal accountability act", which is another measure for us to impose trade restrictions on China.

Taking account of the above reasons, we maintain the "neutral" rating of the industry. In the later stage, we recommend large export enterprises with strong bargaining power and stable orders.

And so on, to maintain the investment rating of the above company's "overweight".