Higher Than Expected Policy Tightening Leads To Higher Financing Costs In Garment Industry

At present, raw materials are low in shock and high in retail prices.

China's cotton price index (328) has dropped by 2.28% in recent years.

The price increase has accelerated the growth of retail sales.

In September, the retail sales of clothing, shoes, hats, knitwear and textiles increased by 27.6% over the same period last year, up 5.7 percentage points from 21.9% in August, and the growth rate has reached a new high since February.

The growth rate of textile and garment exports was down again, and the export volume of textile yarn, fabric and products increased by 16.64% in September compared with that in August. The growth rate dropped significantly from 25.24% in August, reaching a low level since March.

Clothing exports amounted to US $15 billion 33 million, up 13.88% from the same period last year, or 26.91% higher than the 26.91% in August.

The export situation of textile and clothing is still not optimistic.

Garment production growth rate continued to fall, but the inflection point can be expected.

In September, the total investment in fixed assets of textile, clothing, footwear and hat industry increased by 40.50% over the same period last year, down 1.6 percentage points from 42.10% in the first 8 months, but the growth rate slowed down, but remained high.

Cloth production increased by 11.25% over the same period last year, up 0.41 percentage points from 10.84% in August, and the de stocking is still in progress.

Clothing output increased by 6.41% over the same period last year, down 1.39 percentage points from 7.80% in August.

In terms of investment strategy, we should look for enterprises that can continuously raise prices.

Taking into account the overall macroeconomic environment and the effect of price increases on sales, we can see that the acceleration of the rise in retail prices is expected to slow down at the end of the fourth quarter.

In terms of investment opportunities in textile and garment industry, we believe that the structural price increase brought about by the upgrading of product structure and the expansion of branding consumption is more sustainable. It is still the most noteworthy investment opportunity to maintain the industry's "optimistic" rating.

It is suggested that the brand clothing and home textile sub industries with high growth should be locked in advance by placing orders.

We continue to look for the investment targets with definite growth under the dual promotion of benign extension and connotation growth.

What matters is not only the explosion of short-term performance, but also the ability to sustain long-term growth based on corporate management capabilities.

On the whole, we recommend the Pathfinder, search and Semir clothing and good news birds with high growth rate.

Risk warning: human costs and commercial rents continue to grow. The macroeconomic downturn is hitting consumer confidence. The appreciation of the renminbi and the economic crisis in Europe and the United States exceed expectations. The tightening of policy leads to higher financing costs.