Textile And Clothing: In The Season, Quietly Watching Brand Competition.

The volume of retail sales of the major retail enterprises in China has seen negative year-on-year growth for the first time in recent months, and the characteristics of consumers' rational consumption are highlighted. This month, hundreds of major retail enterprises across the country have all kinds of clothing. Retail sales A year-on-year decline of 1.98%, the first decline in garment retail sales in recent months.

Market review: the Shanghai Composite Index, Shenzhen stock index and Shanghai and Shenzhen 300 fell 6.83%, 9.02% and 8.30% respectively this month. The textile and garment sector failed to extend the previous phase of the rally this month, with an adjustment of 10.08%, which is in line with our review. That is, the cumulative price of the industry is too high, and the short-term performance is not enough to support the valuation. As of the announcement period, we released the "buy" rating of the king of nine and search for the first self assessment commentary began. Gain Respectively, 24.88%, 3.81%, far exceeding the plate, the same period in the market. Decline.

Industry tracking: raw material prices rebounded slightly. This month, the 328 cotton price index rebounded, or 3.64%, and the US cotton spot Cotlook:A index fell by 2.77%, taking into account the country's 19800 yuan / ton purchase and storage price. It has been decided that it will help to prevent excessive cotton prices from being concentrated on the new cotton market. We expect cotton prices to stabilize in the next year. The price of chemical fiber raw materials increased slightly, polyester filament POY and polyester staple fiber increased by 1.04% and 3.99% respectively, viscose filament and viscose staple fiber increased by 0.48% and 5.04% respectively, and the price of acrylic staple was unchanged from last month.

Upstream manufacturing terminal operation Situation slowing down 。 In 2011 1-8, China's textile, clothing, footwear and hat manufacturing industry fixed assets investment totaled 136 billion 329 million yuan, the cumulative year-on-year growth rate increased from 6% in February 2009 to 42.1% currently, but the 44.1% growth rate decreased by 2 percentage points from the same month last year. The industry still showed a strong degree of landscape gas, but the growth rate was slight. slow down 。 In August, China's clothing output was 2 billion 250 million, with a year-on-year growth rate of 7.8%, compared with last year's 20.78% year-on-year growth rate, and the growth rate was the lowest since May last year.

The volume of retail sales of the major retail enterprises in China has seen negative year-on-year growth for the first time in recent months, and the characteristics of consumers' rational consumption are highlighted. This month, the volume of retail sales of all kinds of clothing in 100 major large retail enterprises decreased by 1.98% compared with the same period last year, the first decline in garment retail sales in recent months. Most of the major commodities showed negative year-on-year growth, while anti season clothing such as winter clothes continued to grow, and retail sales grew by 4.9% over the same period last year. Most of the apparel retail sales showed a decline year by year, especially the women's retail sales which had always been stable. Compared with the same period last year, they also showed a decline. This shows that consumers' consumption intention has been affected to a certain extent under the pressure of rising clothing prices, while the year-on-year growth of anti season clothing shows that the characteristics of consumers' rational consumption are further highlighted.

Investment suggestion: the price increase factor in the second half of 2011 still exists. The profit margin and price increase of autumn winter clothing are even more than that of spring and summer clothing. Therefore, the overall growth rate of the industry in the second half of the year is expected to continue to maintain a good momentum in the first half of the year. But the price increase factor in 2012 is weaker than that in 2011, especially for casual wear and home textile industry. At the same time, the cost of raw materials and the price rigidity of brand clothing will enhance the gross margin level of the industry in 2012, so the profit growth rate should be higher than that of sales revenue. Therefore, we can judge that the time window from the end of 2011 to the annual report will be the best opportunity for the textile and apparel industry to perform. At present, the industry's overall investment proposals remain "overweight". (2) it is recommended to focus on the order meeting situation from 8 to October. Historical experience shows that the annual performance of brand enterprises in textile and garment industry can be more than half of the order of futures orders. Therefore, we suggest that we focus on the details of subsequent orders. Considering the inventory risk, the seasonal characteristics of the industry and the concerns of the enterprises and franchisees about the inventory, we will be optimistic and cautious about the next year's spring and summer product orders.

(3) at the company level, we propose to focus on the listed companies that still have the valuation advantage and future growth. We continue to recommend the listed companies with high growth in the future: Nine herd Wang (601566), search for (002503) and Meng Jie home textiles (002397).

Risk Disclosure: export tax rebate rate adjustment, channel cost increase, enterprise going stock and order situation will be lower than expected, accompanied by the risk of market valuation downshift, and some recent companies lifted the risk.