Haitong Securities: Textile And Garment Sector 2011 Annual Report

Textile exports are in a slump and clothing should be looked at. Our country will be in the process of economic growth mode from "investment pull" to "domestic demand start up" for a long time, and the industry will have broad prospects under the framework of "big consumption".

The brand clothing sub industry in the textile and garment industry has attracted much attention from the concept of consumption.

The company with the capability of R & D and design, abundant capital and ability to expand and expand channels is a competitive company with core competitiveness.

These companies are expected to expand along with external channels and increase gross margin. The added value of brands will continue to rise, and they will continue to get excess returns above the average level of the industry.

The golden age of China's brand clothing industry can still be maintained for more than 10 years, and investment in Brand Company can share the feast of industry growth.

At present, China's brand clothing listed companies are still scarce, so we still think we can still take a package buying strategy.

Pay close attention to the undervalued 002154.SZ and 002003.SZ, the 300005.SZ of the faster growth of compound growth and 300005.SZ, and the daily news of Xun Xing, which has already appeared at the lowest performance. The latest research and information 5 (002098.SZ) and Mei Bang dress (002269.SZ), the Bank of China (002003.SZ), which controls the scarce resources and the improvement in the industry, the Hong Kong soybean (600400.SH) that has the asset injection and has much room for improvement, has the resources of manganese ore and has the assets to be injected into the expected sainty (600287.SH), the general term order is about to bring about the turning point of the technology, and the only beneficial variety of the jadeite price is Dongjin Yu (600086.SH). On the choice of stocks, we propose

The total turnover of the 108 Canton Fair increased by 6.71% over the same period last year, down 9.45 percentage points from the same period last year.

Textile and clothing are basically flat.

We regard the 108 Canton Fair as one of the performances of the peripheral economy, which is still sluggish. We also take the indicators of consumer spending and consumer confidence of major exporting countries as well as the trend of RMB exchange rate to draw a conclusion that we can see the prospect of the resumption of external demand.

We maintain that textile and garment exports continue to decline in the judgement, expected in 2011 textile and garment export growth dropped to around 15%.

Despite the fact that the cotton price has been rebounded in mid November, the cotton price has been rebounded in the middle of November despite the fact that the state has issued a policy of tightening credit restrictions on cotton enterprises, slowing textile and clothing exports, and cutting down production and output of small and medium-sized textile enterprises.

In the first 10 months of 2010, the retail sales increased by 18.30%. In August, the sales of clothing sold by hundreds of key retail enterprises increased by 16.8% over the same period last year, indicating strong domestic consumption capacity.

Because the income level of residents is still in the ascend trend, the proportion of Chinese residents' consumption in total income is still relatively low, and the propensity to consume is rising continuously.

We expect retail sales to grow at around 18% in 2010. According to historical experience, money creates consumption. In the 1-2 years after the expansion of M2, social consumption began to enter a period of high growth. In 2009, the M2 growth rate was maintained at 20-30%. The over issuance of money will be reflected in the consumption field in 2011, plus the expected inflation rate of around 4%. We expect the retail sales growth in 2011 to be between 18-20% and even more than 20%.

In the context of consumption upgrading and inflation prevention, we have long been optimistic about the prospects of brand clothing.

We compare the growth process, financial data and market value of domestic brand clothing listed companies with overseas brands GAP, POLO, ZARA and H&M. Our brand clothing and home textile industry are still in the initial stage of growth and have broad prospects for the future. Compared to a second-tier city, the three or four line market of urban and rural areas and rural areas will increase faster in the future, while the lower concentration of industries on the three or four line market will provide a larger market space for those companies with independent brands and companies experiencing channel sinking.

In addition, the main topic of the "outline of the Ministry of industry 12th Five-Year plan" recently introduced may bring some opportunities to the textile companies of some diversified development, but our main focus is still on the brand clothing that benefits from the concept of consumption.

Channel expansion is still the main direction of brand clothing companies.

However, we believe that with the increase of rents and deduction points, the inward upgrading capability of enterprises is more critical.