The Increase In The Price Of Products Made The Export Of Textile Products Increase In The First Quarter.

In the first quarter of 2010, the export volume of textile and clothing increased significantly, exceeding our expectations. Exit The main reason for the sharp increase in the volume is that the prices of export products have increased considerably over the same period. Despite the huge increase in exports in the first quarter, we still believe that annual export growth will slow down. industry The increase in costs has caused most SMEs to cut down production or even stop production, resulting in the concentration of orders to large enterprises, leading to an increase in the order option of leading enterprises. Product pricing and high value-added orders will lead enterprises. Two thousand and eleven Year's performance continued to grow. We still suggest that we should focus on leading enterprises in various sub sectors of the textile industry.

Main points of investment:

The export volume of textile and clothing increased substantially in the first quarter, which exceeded our expectations. According to statistics from the General Administration of customs, China's textile and apparel exports totaled US $48 billion 627 million in the first quarter of 2011, an increase of 23.96% over the same period last year, and the growth rate was significantly higher than that of 13.56% in 1-2 months. Among them, the export of textiles was US $20 billion 165 million, an increase of 32.71% over the same period, and exports of clothing and accessories reached US $28 billion 461 million, up 18.42% over the same period last year. This result is beyond our expectation.

The main reason for the substantial increase in export volume is that domestic export enterprises have been raising their export prices in the environment of rising raw material prices and rising labor costs, because the price of export products has been increasing at a monthly rate of around 5% - 10%, resulting in a substantial increase in export volume due to the larger increase in export prices over the same period.

The advantages of the complete industrial chain will continue to guarantee the order of textile and clothing in 2011, but export growth will slow down in 2011.

Although the price increase of domestic exports by 20% to 30% is generally unacceptable to foreign businessmen, some European and American customers have begun to reduce their purchases in China, and some low-end goods will be purchased more from Southeast Asia. However, China has a complete industrial chain advantage. Therefore, we believe that the order spanfer is limited, and the domestic textile and garment exports will continue to grow in 2011 under the influence of the domestic textile industry chain advantage and the rigid demand of Europe and America, but the growth rate of export volume will slow down.

In 2011, the adverse factors such as rising raw materials and labor costs will polarize enterprises in the industry, and "order to large enterprises" will make leading enterprises more interested in the quality of orders. At present, labor costs rise 20-30% will affect 70% of the textile and garment industry. The gradual rise of cotton prices in the industrial chain will enable many small and medium-sized enterprises to withdraw from the market competition. In the future, in the era of high cotton prices, the structural readjustment of textile industry is inevitable. After a big shuffle, the enterprises will be polarized and the industry will appear "strong Heng Qiang, and the weak will be eliminated". Advantageous resources will accelerate to large enterprises. Orders are concentrated on large enterprises, and large enterprises' market discourse power is increased. As far as the current situation is concerned, the large textile export enterprises generally reflect the good order in early 2011, and have made preparations for expanding production. In addition, SMEs do not dare to take orders, large enterprises have larger order options, and order quality is valued by these enterprises.

Focus on yarn, grey fabric and fabric leading enterprises. Looking forward to 2011, we believe that the domestic market of textile and apparel industry will continue to maintain steady growth under the environment of domestic consumption upgrading. On the export side, although the overall export growth of the industry will decline in the first half of the year, this is not an order problem, but most export oriented enterprises do not take orders with low profit margins. Small enterprises are forced to reduce orders by cost of raw materials, which will lead to the concentration of orders to large export enterprises, and leading enterprises in various sub sectors will have more choices. In 2011, leading enterprises in various sub sectors will have more opportunities for profit growth. Therefore, we believe that we should focus on the leading enterprises in various sub sectors of the textile industry in 2011. Notable listed companies are Lu Tai A, Huamao shares, Xinye textile and Huafu color spinning.

Risk warning: in the future, the excessive appreciation of RMB will engulf enterprises' order profits, and the future global economic trend will directly affect the order quantity of enterprises.