Appreciation Of The Renminbi In The Textile Industry

With the expected appreciation of RMB appreciation, the industries closely related to it begin to be concerned by investors.

Analysis by the market research center of Securities Daily found that

Appreciation of the renminbi in the textile industry

Textile industry: can withstand 5% RMB appreciation pressure

Negative correlation between RMB appreciation and industry efficiency

Because China's textile and garment enterprises are mainly small and medium-sized enterprises, the sensitivity to RMB appreciation is very strong. When the profit margin is approaching the breakeven point, if the RMB appreciation restarts or even accelerates this year, most enterprises will have no profit.

The Ministry of finance of Xiangcai securities expects that the appreciation of RMB will be between 3%-5% this year, and this increase will be the upper limit for most enterprises.

The counterpart associations of several labor-intensive products roughly estimate that the net profit rate of the industry will drop by 1 percentage points every 1 percentage points, while the average net profit of these industries is only 3%-5%.

Under the environment of demand in Europe and America, the production of domestic export enterprises is currently under production.

The export amount will continue to rise, and the price of textile raw materials will rise. The increase in labor costs will erode the profit of export enterprises, increase the contract price of export orders, and raise the price of export products, so that the export amount of domestic textile and clothing will recover quickly.

In the future, with the further improvement of the global economy, the unemployment rate data in Europe and the United States will decline, employment will improve, and consumer psychological barriers will gradually be eliminated. The global textile and clothing consumption is rising, especially the demand for medium and high-end clothing, and the export of domestic textile and clothing will gradually revive.

From the above factors, domestic textile and garment exports

Recovery of global textile industry

Under normal circumstances, the rise in global clothing consumption demand will drive the growth of textile demand.

As China has the most complete textile industry chain, the growth rate of domestic textile exports is greater than that of clothing exports in the case of global apparel demand growth.

After the financial crisis, the rapid decline of demand for high-end clothing caused the decline of textile growth rate more than that of clothing.

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In the continuous rebound of the industry boom, the spinning and weaving Board continues to rise in kinetic energy.

However, considering that the valuation pressure has been relatively large, Xiangcai securities still has a more cautious attitude towards the whole year's spinning and clothing index exceeding the big market, so we continue to maintain the "neutral" investment rating of the industry.

Short term recommendations are concerned about the trading opportunities in the industry and annual reports.

CIC said that because of the rigid international demand for domestic clothing exports, the future situation will not continue to deteriorate, only to the good.

According to the characteristics of the current international market demand (rigid demand still needs "made in China"), the demand of the future international market will gradually recover with the recovery of the economy.

We should focus on the leading companies with strong bargaining power, such as Lu Tai A (000726), Shandong Ruyi (002193), Jiangsu sunshine (600220), etc.

Star stocks in textile industry

Jiangsu sunshine: the perfect storm is on the verge of fire.

Jiangsu sunshine is the world's largest worsted spinning enterprise, or the key high-tech enterprise of the national Torch Program. It has 120 thousand spindles and 600 looms. It is the largest production base of high grade and high quality thin fabric in China.

The "sunshine card" worsted fabric has the largest share in the domestic market, and the leading position of the industry is outstanding.

The company invested 234 million yuan to set up Ningxia sunshine silicon industry company (65%). The company plans to produce 4000 tons of silicon crystal per year, and its first annual output of 1500 tons of silicon crystal project has been successfully launched, and it was put into operation in March 2009.

The company has signed a long-term supply agreement with the downstream silicon enterprise hareun photovoltaic. Due to the policy support of the state to increase the photovoltaic industry, the Ningxia sunshine silicon industry company invested by the company in 2009 will be fully put into operation, and the business will continue to grow in the future.

China's large fine wool production enterprises, its "sunshine card" worsted fabric domestic market share.

At present, the company has undertaken dozens of national patents, including 863 national projects, national technological innovation projects, national key new products, and national high-tech torch project research projects.

Voyage shares (600987): bottleneck in textile recovery

Printing and dyeing will become the bottleneck of demand recovery in the upstream industry chain of textile industry. At the beginning of 1H09, exports will promote the revival of textile and garment industry, and then drive the growth of textile and apparel upstream industry chain; environmental barriers will lead to the entry threshold of printing and dyeing industry, and there are basically no new printing and dyeing enterprises in the near future. In 2007, the adjustment of printing and dyeing industry has increased the concentration of industries, making the industry a bottleneck for the revival of textile and apparel upstream industry chain, and the overall supply and demand situation of the industry is better.

The company is the largest printing and dyeing enterprise in the country. It has 800 million meters of printing and dyeing capacity, 19 million meters of weaving, 500 million degrees of electricity, 3 million 300 thousand tons of steam and 10 thousand tons of dyestuff. It constitutes a complete printing and dyeing industry chain.

Printing and dyeing business adopts the mode of commissioned processing and processing fees to reduce operational risks.

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