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Textile And Apparel: Brand Clothing Companies Have Higher Valuations Than Historical Values.

2011/8/11 18:35:00 42

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Sub sectors: from the perspective of demand, the export dependency ratio of textile sub industries is still high. The proportion of EU and US exports to China has increased from 8.6% in 1995 and 8.8% in 2010 to 21.6% and 15.8% in 2010. The twists and turns of economic recovery in Europe and the United States will have an impact on domestic consumption demand, and affect the export of Chinese textile and clothing.

We believe that the fall in export growth in the second half of this year is a matter of great probability.

From the industry itself: cotton prices continue to fall, Zhou Chengjiao average price has approached 19800 yuan / ton of storage price.

Due to the cyclical nature of the production of textile enterprises, the relatively high price of raw materials hoarded earlier will make it face the embarrassing situation of high cost and low factory price. Gross profit margin is expected to be low throughout the three quarter.

We suggest that we should pay attention to the investment opportunities in the four quarter, which will bring the gross profit margin to a higher level.

Brand sub industry: cotton prices fall, long-term good brand clothing enterprises development, brand clothing enterprises will convene 12 spring and summer ordering meeting in 8-10 months. We think the price will slow down. We should pay close attention to the structure of order growth.

There are no worries about the fundamentals of the short-term sector. We are concerned about the investment opportunities brought about by the fluctuations in the market and the valuation level.

We will continue to focus on the seven wolves, the good news birds, the nine herd kings, the home textile companies and the pformation of the Great Yang creation.

The price earnings ratio of the textile and garment sector has dropped from 28.55 to 28.31 this week.

The average premium of A shares and textile and garment sectors is -0.34 and -0.12 respectively, of which the textile and clothing sub sectors are -0.3 and 0.04 respectively.

From the relative P / E ratio,

clothing

Sub plate valuation level is higher than the historical average.

The price of raw materials continued to plummet this week. The cotton price 328 index fell 3.31%, and the weekly closing price approached 19800 yuan / ton. In August 5th, the price was 19692 yuan / ton, or below 19800 yuan / ton.

We believe that the downward trend of cotton yarn prices and the progress of inventory will affect the upward trend of cotton prices.

Risk suggests repeated effects of economic recovery in Europe and America

Exit

Demand.