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ROE In Textile And Apparel Industry Is At Its Highest Level In The Past Ten Years.

2011/5/12 11:35:00 94

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Textile And Garment Industry Cost Of Cotton Price Increase

At present, the textile and garment industry ROE is at its highest level in the past ten years.

In the 1 quarterly reports in 2010 and 2011, the textile and garment industry ROE (TTM) was 11.44% and 11.85%, respectively, and is still in a steady rise stage.

The profit level of the industry is the high point since the 1 quarter of 2004.

In 2010 and 2011, the 1 quarterly reports showed that the net interest rates of the textile and garment industry were 9.49% and 10.29% respectively.

Among them, the ROE of the manufacturing sub sectors increased most obviously. In 2010 and 2011, the 1 quarterly reports made the ROE (TTM) of the sub sectors 10.29% and 10.34%, respectively, which increased by 2.46 and 2.46 percentage points respectively over the same period last year.

Manufacturing sub sectors - cotton price leads profitability:

Global supply and demand imbalance has been driving since September 2010.

Cotton price

In the same period, the downstream consumer demand was strong, and the price pmission smoothly, making the profitability of the manufacturing industry greatly improved, especially the upstream yarn enterprises with low price cotton stocks ushered in the profit point of nearly ten years.

In the second half of the year, the risk of falling cotton prices and increased inventory pressure and the impact of high base on the profitability of the industry are facing downside risks. It is recommended to avoid faster inventory companies, such as Huamao shares, Huafang textile, Shandong Ruyi, etc.

Brand retail sub industry - epitaxial expansion leading performance:

High cotton prices dominate

Cost increase

In 2011

Textile and clothing

Terminal retail is fully reflected.

Compared to food, health care and other necessary consumer goods, textile and apparel as an optional consumer goods, the terminal price increase in 2011 has a relatively large impact on terminal consumption. We are cautious about the same store growth of the brand retail sub industry in 2011, and the company's performance growth needs more extensive expansion by opening new stores and expanding the area of old stores.

We are more optimistic about the listed companies that will accelerate the opening up speed in 2011, including: Pathfinder, search for special products, home textiles, etc.

Maintain the industry's "leading city -A" investment rating:

We believe that in 2011, exports and domestic sales remained stable growth. The price increase in the first half of the manufacturing industry and the increase in the price of spring and summer wear in the brand retail sub industry basically covered the pressure of cost increase. The two quarter profitability of the industry is expected to further improve. At present, the valuation of the whole industry is about 26 times, and we maintain the industry's "leading city -A" investment rating.

Taking into account the downward pressure of cotton prices and the pressure of manufacturing sub sectors to store inventory, and the ability to pfer brand retail cost is stronger, the domestic retail sales in the second half of this year will increase steadily in the autumn and winter. Therefore, we are more optimistic about the brand retail sub sectors, especially the listed companies accelerating this year.