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Textile And Clothing Raw Materials Prices Rebounded Slightly, Quietly Watching Brand Movement

2011/10/12 15:04:00 28

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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 share 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 nine kings and the search for the first self assessment commentary, the cumulative increase of 24.88%, 3.81%, far exceeding the plate, the same period in the market.

Industry tracking:

Raw material

Prices rebounded slightly.

This month, the 328 level cotton price index rebounded, rose 3.64%, the United States cotton spot Cotlook:A index fell slightly 2.77%. Considering the country's 19800 yuan / ton of storage prices have been determined, it is beneficial to prevent the excessive pressure on cotton prices. We expect that the price of cotton will be stable around the storage price 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.

The upstream manufacturing side is slowing down.

In 2011 1-8, the fixed assets investment of China's textile, clothing, footwear and hat manufacturing industry reached 136 billion 329 million yuan, and the cumulative year-on-year growth rate increased from 6% in February 2009 to 42.1%. However, the growth rate dropped 44.1% percentage points from the same month last year, and the industry still showed a strong degree of natural gas, but the growth rate slowed slightly.

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.

Hundreds of major retail enterprises in China

retail

In recent months, the volume has seen negative growth for the first time in the past year, 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 advice:

(1) the price increase factor in the second half of 2011 still exists. The profit rate and price increase of autumn winter clothing are even more than that of spring and summer wear. 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) the recommendations focus on 8 to October.

Order-placing meeting

Condition.

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 will continue to recommend the listed companies with high growth in the future: Nine Mu Wang, search for special and Meng Jie home textiles.

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.