Cotton Operation Trend In 2011

The imbalance between supply and demand spawned high cotton prices: in 2010, the imbalance between supply and demand in the world was the most important reason to drive up the price of cotton in the current round.

But we judged that the domestic textile and clothing sales in 2010 will maintain 25%-30% growth, slightly higher than this year's growth rate, while the export growth rate will slow down, but it will still maintain 10%-15% growth. Therefore, the downstream demand will maintain a steady growth.

The trend of cotton production decline in China is difficult to improve before the new cotton market in October 2011.

The high cotton price has led to the profit differentiation of enterprises, and the textile and apparel retailing industry has the strongest ability to pfer costs: the high cotton price has brought the textile and garment industry into the era of high cost operation, and has promoted the differentiation of the profits of each sub industry.

We believe that the textile and garment retail industry is the most advanced consumer, with the highest cost pfer capability and the most profitable business. The subsidiary industry of garment accessories occupies a smaller proportion of total cost of textile and clothing, less impact on cost and stronger profitability.

Next year, downward trend of cotton prices, cotton textile, printing and dyeing, clothing manufacturing and other sub sectors income trend downward trend, inventory adjustment will affect the quality of asset operation, the company's profitability is facing huge challenges of raw material fluctuations, downside risks are greater, clothing manufacturing sub industry cost pfer ability is the weakest.

The textile and garment retail industry will be the highest performance in the next year. In 2011, in the context of high cost, we mainly recommend the textile and garment retail sub industry with the strongest cost pfer capability and risk tolerance capability.

The 2011 Annual Report will be the highest annual performance in the industry.

In the first half of this year, with the increase in demand and peak season, the retail sales and profits of the first half of the year increased rapidly. With the peak season of consumption, the terminal consumption slowed down in the 2 quarter, and asset turnover began to slow down.

Give textile and clothing retail industry "leading city -A" investment rating: high cotton price makes 2011 industry into high cost.

Recommended portfolio: Luo Lai home textiles, fuanna, Rebecca and Saturday: in the selection and recommendation of investment targets, we follow two main lines: one is in the fine industry sectors of textile and clothing retail industry, we choose the sub sectors with fast growth and low cost pressure. We are optimistic about the three major sub industries of wig fashion, outdoor products and home textiles, and combine the valuation level in 2011. We recommend the home textiles, fuanna and Rebecca.