Guotai Junan'S Strategic Report On Textile And Garment Industry In 2011

In 2011, industry export growth will drop to about 10%, and domestic consumption will still maintain more than 20% growth.

Investment strategy

In the 11 year, the export growth rate dropped to 10%, and domestic consumption growth rate remained above 20%.

Due to the combined effects of raw materials, labor prices, interest rates and appreciation, the profit margins of manufacturing enterprises will decline significantly over the past 10 years.

To give textile and garment manufacturing "neutral" rating.

It is recommended to avoid manufacturing enterprises with cotton as raw materials in short term, and recommend the Weixing shares and Xun Xing shares of the accessories industry.

Firmly optimistic about the prospects for the development of domestic brand clothing consumption, the rapid urbanization process and the rapid development of the central and western regions will become an important driving force for the growth of clothing consumption. In the next ten years, domestic clothing consumption will usher in a golden growth period.

The existing brand clothing and home textile enterprises in the A share market will benefit significantly from the high growth of the industry.

In the 11 year, brand channel enterprises will benefit from inflation and usher in accelerated growth in revenues and profits.

The brand clothing and home textile industry "overweight" rating is given, and the key recommendation is located in the three or four line market, with large market space and rapid growth in search.

Search for special: Young casual wear stars in three or four tier cities

The company's product positioning is very clear, put forward the concept of "fashion to the countryside", the main three or four line market 15-29 years old young consumer groups, the price is cheap, the terminal price is between 30-300 yuan (discount in the case of lower).

We believe that compared with the already saturated market and the increasingly fierce competition in the first tier market, the three or four line market has a large consumer group, and clothing consumption is just starting. There are many resources available for opening shops, and it also has the characteristics of low store rents and less discount on clothing sales, so the market space in the future will be larger than that in the second tier market.

The operating mode of light assets is similar to that of Smith Barney, which is similar to that of the seven wolves in 05/06. Its profit and growth rate is even better than that of the seven wolves.

In the 09 years, the seven wolves have developed to nearly 2 billion of revenue, 200 million net profit and nearly 3000 stores. We believe that the company will not achieve this scale in 3-5 years.

In 07-09, the company's store grew by 77.53%, sales revenue increased by 83.14%, net profit increased by 111.63%, gross profit margin and net profit margin increased year by year, showing a very healthy growth trend.

The company does not consider raising investment projects. In 11 years, the natural growth of franchised stores is around 70%.

We think that considering the brand effect of listing and the promotion of over raised funds, the possibility of achieving this growth rate is relatively large.

EPS is expected to be 1.1 yuan, 1.8 yuan and 3.06 yuan in 10-12 years, with a compound growth rate of 70%.

Implementation of equity incentive and annual report high probability of delivery

Xun Hing shares: revenue growth, profit margins to promote performance reversal

The company mainly produces, sells and sells zippers, pull heads and fittings of three categories: metal, nylon and plastic steel. It has five production bases in Fujian, Shanghai, Tianjin, Dongguan and Chengdu. It is the largest and most complete zipper manufacturer in China.

The company's performance in 08 or 09 years has dropped sharply. The main reason is that large scale rapid expansion has increased a large number of expenses (mainly manpower costs and depreciation), and because of internal and external causes (financial crisis and slow progress in production), revenue is not up to expectations, cost growth is faster than revenue, and the cost rate has increased substantially, resulting in a decrease in operating profit.

But at the same time, the gross profit margin of the company has not been greatly affected, and the 09 year has also hit a new high, which shows that the competitiveness of the company's products is still growing.

At present, the industry's demand is good, the existing capacity of the company can guarantee the compound growth of revenue over 25% years in the next two years. The increase of sales volume will increase the profit rate with fixed costs such as depreciation and depreciation, and the profit growth will be faster than revenue and show a non-linear growth.

The company's performance will begin to reverse in 10 years from the dual engine driven by revenue growth and profit margin.

EPS is expected to be 0.38 yuan, 0.55 yuan and 0.8 yuan in 10-12 years, with a compound growth rate of 58.6%.

The equity incentive plan was announced in November, and the exercise price was 11.73 yuan.