Clothing Textile Three Quarterly Performance Preview: Maintain Rapid Growth Trend

Home textiles, men's wear and youth in textile and garment industry

More than 30% of the growth rate is: Semir clothing; more than 20% of the growth rate is: Lu Tai A; the growth rate is less than 20%: Saturday.

In the molecular industry,

1) the fastest growth of home textiles sector: fuanna (77%), Luo Lai (56%), Meng Jie (40%, operating profit growth 53%).

Revenue growth has exceeded 30%, and profit margins have improved.

The industry continues to maintain rapid growth, with a significant increase in concentration.

But in 2012, the order of spring and summer in 2012 is basically flat, which is a slowing signal for the home textile sector.

2) men's wear sector accelerated growth: seven wolves (54%, 2011 autumn and winter shipment ahead of the previous year), reported birds (50%), nine Mu Wang (40%), YOUNGOR (48%), apparel and real estate business net profit growth of 14%, the current price of the clothing business only net profit of 24 times PE, asset value is undervalued.

Men's overall price rise is obvious, and the cost increase is passed on to the downstream consumers. The gross profit margin has been significantly improved, and the sales volume has maintained healthy growth.

It is expected that over the next two years, it will maintain a growth rate of more than 30%.

3) the growth of the leisure sector is remarkable: the United States (132%), the low performance in the first half of 2010, resulted in three quarterly earnings growth of over 100% over the first half of the year, and 35% increase in revenue. Semir (32%), as an industry leader, continued to maintain rapid growth and the market share expanded further. It is expected that the growth rate of 30% over the next two years will be maintained.

Search at (72%) achieved low.

4) women's shoes are strong and weak: Hong Kong stock BELLE is the undisputed No.1 of the Chinese women's footwear industry, and the footwear growth in the three quarter reached 18.5%, and the net sales in the first three quarters increased by more than 15%.

A shares women's shoes business increased by 20% on Saturday, but due to the new store opening in 2011, advertising investment and labor costs increased significantly, resulting in a low growth rate of business growth of only 1%.

5) the sports industry is facing challenges: the sports division of Lining, Anta, PEAK and BELLE all reported low growth in the same quarter in the three quarter, indicating that the sports industry is facing the problems of excessive competition and declining demand. It is in a difficult and adjustment period, and there is no significant improvement in the next 12 months.

6) the upstream textile enterprises are affected by the sharp fall in cotton prices.

Focus:

Sub industry differentiation is obvious in different stages of brand development.

In the first stage (branding stage), the industry (such as home textiles, men's wear and leisure) has better performance and great potential for development. In the second stage (brand competition stage), the industry (such as sports) has excessive competition, and the performance has slowed down or declined; the industry leaders in the third stage (brand winning stage) industry, such as BELLE in women's shoes industry, have maintained steady growth.

Next year, brand entry into department stores will be more difficult than this year.

This year, the brand represented by home textiles has developed rapidly in the retail outlets of department stores. All stores want to increase the allocation of brand home textiles and clothing, so this year, it is easier for brands to enter department stores.

Correspondingly, brand expansion in department stores may become more difficult next year.

It is estimated that home textiles, men's wear, casual wear and other sectors will maintain a growth rate of 30% or even more than 35% in 2012 (the average growth rate of our forecast for the retail sector is 33%).

Valuation and recommendations:

A shares: can focus on men's wear seven wolves (2011/12PE:25x/19x), 26x/20x and leisure brand 22x/16x (USA), Semir (24x/18x), the performance can maintain more than 30% growth rate, the valuation is more.

Hong Kong stocks can focus on BELLE (21x/16x) and 12x/9x, with good fundamentals and low valuation.