Textile And Clothing: The Dawn Of Retail Enterprises Is In The Former &Nbsp; The Focus Is On 6 Stocks.

We have always thought that the beautiful annual report and quarterly report, reached or exceeded the 3/4 monthly order data, and the 2 quarter cotton price downward trend is clear, this year may become a catalyst for the resurgence of the textile and garment retail sector.

At present, the price of cotton has been declining. The first quarter earnings growth of fuanna has been announced (50-70% net profit growth) has exceeded market expectations. The order of the seven wolves will probably exceed expectations. It is strongly recommended to buy Textile and garment retail enterprises with low valuation and high performance growth.

At present, the seven wolf's 11 year dynamic valuation is only 23 times, 18 times of Weixing share, 25 times of Meng Jie's home textile and 28 times of fuanna, and has a very high margin of safety.

We believe that for these excellent brand retail enterprises, we need to intervene at low valuations and adopt buy and hold strategy.

This week, it is still recommended to focus on seven wolves, Weixing, fuanna, Luo Lai, Meng Jie.

Dongfang fortune mobile phone stock control software reveals how the stock will not rise in the stock market? Watch out for a sudden reversal of the market!

This week, the government issued a cotton protection price policy, and the price dropped to 19 thousand and 800 yuan / ton, and the temporary storage and purchase began.

We believe that the purpose of this move is to clarify the trend and direction of the downward trend of cotton prices and eliminate the suppression of demand by high priced raw materials. The medium and long term is to prevent possible cotton prices from falling to an unreasonable level, affecting cotton farmers' enthusiasm for cotton planting and ensuring a smooth operation of cotton prices in a relatively reasonable area.

Market rumors cotton

Recent policies are frequent, and the possibility of falling cotton prices is increasing.

The investment strategy remains unchanged in 2011: first, continue to be optimistic about textile and garment retail enterprises. Good performance and falling cotton prices may become catalysts for stock prices: 3-4 is an important investment window.

On the one hand, annual reports and quarterly reports are beautiful, and the reliability improvement of the 11 years' performance growth will provide investment opportunities; on the other hand, the autumn and winter clothing orders of textile and garment retail enterprises in 3/4 will achieve great expectations, and the leading enterprises have more than expected expectations; in addition, the determination of cotton prices will also help to dispel the market worries; two, the export manufacturing textile enterprises should have a low gross profit margin; the three and 3-6 months may decide the future cotton price direction, and the downward probability is greater than the upward probability.

Review of key events of the week

Fuanna first quarter earnings growth: the first quarter net profit growth is expected to grow at 50-70%;

Huafu color spinning Announces 2010 annual report.

During the reporting period, the company achieved a total revenue of 4 billion 780 million yuan and a net profit of 371 million yuan, up 45.4% and 154% respectively over the same period.

Yantai spandex announced its 2010 annual report.

During the reporting period, the company achieved operating income of 1 billion 490 million yuan and net profit of 256 million yuan, representing an increase of 31.55% and 134.56% respectively over the same period.

Lu Tai A announced the 2010 annual report.

During the reporting period, the company achieved operating income of 5 billion 30 million yuan and net profit of 739 million yuan, an increase of 24.51% and 29.62% respectively over the same period last year.

The annual report 2010 is released on Saturday.

During the reporting period, the company achieved operating income of 1 billion 140 million yuan, operating profit of 133 million yuan, an increase of 29.91% and 3.43% compared to the same period last year, and net profit of 100 million yuan, down 11.87% from the same period last year.

Price fluctuation of raw materials

Entering the traditional peak season, but the price of viscose products dropped and the price of spandex 40D continued to decline, which was originally "bad omen". In addition, the price of viscose staple fiber dropped 1300 yuan to 26500 yuan this week, spandex 40D price continued to drop 500 yuan to 58500 yuan, the Chinese cotton price index once again fell below 30 thousand mark, and the weekend fell to 29852 yuan. We further believe that the downward trend of cotton price in the 2 quarter is greater than upward.

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Next week's investment strategy

This week, A shares were affected by some uncertain factors such as inflation. The market did not find upward momentum. The Shanghai Composite Index fell 0.35% at 2967.41 points, while the Shenzhen stock index closed at 12699.42 points and fell 1.87% in the whole week.

The textile and garment sector is slightly inferior to the market. The overall decline of the plate is 2.28% this week, and the chemical fiber plate has dropped by 3.28% a week.

This week, the eye-catching stock in the plate is Changshan's shares, the company's weekly gain of 7.92%.

Our expectations of falling cotton prices are constantly being tested.

Before, we have always thought that the downward probability of cotton price in 3-6 months is slightly larger than the upward probability. Last week, we revised the judgement: that is, the downward trend of cotton prices in the 2 quarter is greater than the upward trend, and the "slightly" word is abolished. The cotton price declines have accelerated this week, and the latest Chinese cotton price index (level 328) has fallen below 30 thousand yuan.

Cotton prices fell under weak demand and policy pressure, which also led to the price reduction of spandex and viscose and other chemical fibers, which led to a decline in the plate over the market. In addition, the undervalued enterprises represented by Haixin and Tianshan textiles in the early industries and the undervalued enterprises represented by Lu Tai and Dayang creation were all active. This week, these early active stocks were obviously adjusted, which is also the main reason for the plate losing the market.