Clothing Industry: Look For Brand Clothing Companies With Anti Inflation Ability.

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1. Reasons for previous adjustment:

(1) valuations are higher than market averages.

The valuation of partial consumption clothing companies is basically 30 times -40 times, and home textile companies are more than 40 times.

(2) the market is worried about inflation.

2, according to historical experience, the growth trend of clothing retail sales is the same as the trend of CPI, and the proportion of residents' consumption continues to rise, rigidity is strong, and has the ability to resist inflation.

When CPI continues to run high for a period of time, the value is close to or more than 4, residents may use a larger proportion to purchase the necessary consumer goods that increase in price, and reduce the proportion of expenditure on alternative consumer goods.

Therefore, we believe that the overall sales volume of clothing consumption will be negatively affected when the CPI stays above 4%.

This is also one of the main reasons for the pressure on the stock price of consumer clothing companies under the background of inflation.

3, from the perspective of subdividing the clothing industry, the price of sportswear and casual wear is low, and the main growth is mainly due to the increase of foreign brands. At present, the competition is more intense. Business casual men's clothing and medium and high-end home textiles have higher unit price, which can increase the cost pressure and increase gross margin through raising prices. Brands are also more competitive in China and have certain competitive advantages.

Therefore, we believe that the men's clothing that has the ability to raise prices and the fast-growing home textile Brand Company have a good investment value at the low level of valuation.

We are optimistic about the brand name of the home textile company, Hinur, which is valued at 25 times in 2011, which is about 30 times the men's brand seven wolves, the wedding bird, and the 2011 valuation.