Hua Fu Color Spinning &Nbsp; Undervalued Value Gives Rise To Space.

Because China is one of the largest consumer market of clothing and footwear products in the world, the market prospect is very broad.

Among them, the improvement of income level, urbanization process and policy support.

At the same time, near the Spring Festival, brand clothing has become a hot topic recently, and analysts believe that it will drive the rise of brand clothing stocks.

According to the latest statistics of the Securities Daily Research Center, Huafu

domestic

In the next 5 years, the country's "12th Five-Year (2011-2015 year) plan" has identified one of the five major goals of economic and social development: the income of urban and rural residents has generally increased rapidly.

We should strive to achieve the simultaneous growth of household income and economic development, the increase of labor remuneration growth and the increase of labor productivity, the increase of low-income people's income, the continuous expansion of middle-income groups, the significant reduction of the impoverished population, and the continuous improvement of people's living standards and standards.

Clearly increasing the income of the central government will bring China a huge consumer market and a strong consumption capacity, which is possible for stimulating domestic demand and upgrading consumption of residents.

Secondly, China's urbanization process is accelerated and domestic

In recent years, domestic textile and clothing sales have been showing a good growth trend. Since 2000, the retail sales of clothing, shoes and hats and textile categories have shown a rapid growth trend. The growth rate in the 2000-2002 years is basically maintained at 10%. In 2004, the growth rate of -2009 was close to 23.3%. In November 2010, the retail sales of clothing, shoes and hats and textiles increased to 517 billion 700 million yuan, with a growth rate of 24.5%.

Based on the national strategic plan for expanding domestic demand, the continuous improvement of residents' income level, the gradual progress of urbanization and the policy support for the brand clothing industry, Zhejiang Merchants Securities analyst can judge that the industry can continue to grow rapidly in the past 10 years, and the annual sales growth rate will reach 20%-25% in the next 5-10 years.

Net profit increased by 80-100%{page_break}

The company's three quarterly report in 2010 revealed that net profit in 2010 was estimated to be 3.4-3.5 billion yuan, up by 80-100% over the same period last year.

The reason for the change is the continuous optimization of the product structure and the increase in gross profit margin. The company has grasped the best time for cotton procurement, which is lower than the stock price of the cotton market, effectively guaranteed the cotton consumption in 2010, the advantage of brand + resources, enhanced the bargaining power of the company, and increased the profitability. This year, the pfer of Pinghu Ya Garden Estate and Shangyu real estate equity income totaled about 40 million.

In December 2010, the company completed a total of 23.5 yuan / share non-public offering of 42 million 553 thousand and 200 shares, and raised funds after deducting the issuance cost of 980 million yuan. The total investment of 120 thousand yuan colored yarn spinning project in Xinjiang's five main canal was 620 million yuan, and the construction progress was about 620 million yuan. The construction progress took about 2 years, the annual sales income of normal production was 772 million 410 thousand yuan, the annual profit after normal production was 105 million 90 thousand yuan; the total investment of 80 thousand yuan semi worsted yarn project in Shangyu, Zhejiang was 509 million yuan, and it was planned to invest in the collection fund of 80 thousand yuan. It is expected that the total production will be put into operation in October 2011, and the average annual sales revenue will be RMB yuan.

From the perspective of company shareholding, stocks are deeply favored by the fund.

In December 15, 2010, the notice of non-public offering was disclosed. Among the ten largest shareholders, 3 social security funds hold 16 million shares, CITIC Securities owns 6 million shares, and China Foreign Economic and Trade Trust Co., Ltd. has 5 million shares.

In 2010, the three quarterly report revealed that the number of shareholders increased by 9% over the previous period.

The ten largest tradable shareholders are institutional investors holding 20 million 220 thousand shares, of which China shares 1 million 240 thousand shares.

The geographical and resource advantages of the company are obvious.

The location of the company is Huaibei East China's energy and power export base. Its fuel and power supply is abundant and its price is low. At the same time, it is also the main cotton producing area in China. The main raw materials, such as cotton and yarn, are rich in sources and low in cost.

Everbright Securities optimistic about long-term development of the company, Forecast Ltd diluted earnings per share for 2010-2012 years were 1.25, 1.77 and 2.37 yuan, considering its 2010-2012 year three year net profit compound growth rate as high as 60% and 2013, 2014 will still maintain more than 25% growth rate, given 20-22 times earnings and 2011 "buy" rating, target price 35.40-38.94 yuan

GF Securities increased 2010-2012 years, and earnings per share were 1.47, 1.74 and 2.12 yuan respectively.

Given 20-25 times earnings in 2010, a reasonable valuation of 30-36 yuan, the target price of the valuation center 33 yuan, to maintain the "buy" rating.