Textile And Garment Recovery Will Always Come. Don'T Worry About Investing.

We have always expected that the bottom of the industry adjustment and the turning point of the recovery are not obvious, showing a large "pan". The probability of recovery in the second half of 12 years is greater than that in the first half, but the recovery will not be very large.

At present, our expectations in the first half have been verified, and the industry is expected to remain unchanged throughout the year.

domestic

Retail market continued weak trend has not improved significantly: in 1-2 months, the number of retail sales of 100 key retail enterprises increased by 5.1% over the same period last year, 15.2% in March, 20.3% in April, and 12.2% in May, with a growth rate of 10 percentage points lower than normal level in previous years.

Exports still lingered at the bottom: the export volume of the first month of May rose 2.8%, -3.3%, 17.8%, -2% and 7.4% respectively.

Classification: let's see: the export volume of textiles and clothing increased by 1% and 7.9% in 1-5 months, which was significantly lower than the 20.9% and 27.8% level in 2011.

There are three main reasons for the slowdown in the overall efficiency of industries beginning in early 2011: firstly, the development of the industry is inseparable from the economic changes at home and abroad; secondly, the serious oversupply caused by the excessive expansion of the industry.

The domestic market is characterized by excessive number of stores and high inventory. Manufacturing is characterized by serious excess capacity, and finally, the inhibition of high priced products on domestic and foreign demand.

The three main reasons for the slowdown in industrial efficiency are not solved in the short term, and the industry is in pition. Therefore, we believe that the industry recovery will be slow in the next 1-2 years. Relatively speaking, the recovery of export manufacturing enterprises may be slightly earlier than domestic sales because of the recovery of the us.

In the short term, the industry as a whole may be slightly better than the first half of the year, but the expectation of recovery should not be too high.

Domestic textile and apparel consumption is expected to remain in the first half of the second half, while export orders have resumed, but gross profit margins are still difficult to raise, while raw material prices may still linger because of insufficient demand.

In the second half of this year, the investment point of view is to maintain the same investment strategy for the whole year, that is, the strong defensive ability of the high-quality spinning and weaving retail stocks. At the same time, we should continue to suggest that we should pay attention to the high quality manufacturing enterprises with a larger adjustment and a pessimistic anticipation for the future.

The beginning of the three quarter and the end of the fourth quarter are the two important time windows. At the beginning of the three quarter, the market may anticipate the rebound in raw material prices, and expect the market of textile and garment retailers to enter the market. At the end of the fourth quarter, domestic consumption has entered the traditional peak season, and the market has expectations for the winter sales of textile and clothing, or the prospects for the improvement of the domestic export market next year.

Market Review

The performance of the first half of the year is in line with our expectations, fluctuating with the market: in the first half of the year, the textile and garment sector rose by 2.23%, which is not as good as the market (Shenzhen stock index 6.52%).

In the first half of the year, the list of prices was subject matter, brand and chemical stocks, and the plate effect was not obvious.

We have always thought that this year is the "mini year" of the plate, and that it will continue to fluctuate with the market in the second half of the year.

Risk warning

Since the 4 quarter of 2011, all kinds of market data have shown that consumption growth has slowed down. The development history of textile and apparel retail brands in the past 20 years is actually "Daniel". No matter what the capital market or industry is, there is no experience to face the complex situation in the pitional period. The market is worried that leading enterprises can maintain high growth. Based on the recent statistics, domestic textile consumption statistics, department store data and terminal retail situation are deviated from the growth of listed companies. This divergence is the main factor to suppress the performance of domestic brand enterprises in the past 12 years.

Investment manufacturing

The biggest confusion is that when the recovery is still in confusion, and the current order has increased, but the gross profit margin declined, resulting in continued decline in performance, thereby affecting investor confidence.

From the perspective of investors, domestic investors do not have the opportunity to experience the decline of brands and the collapse of stock prices, such as sportswear, fortune global, China and so on, like Hongkong and European and American investors.

Basically, investment is the main product. Investors are accustomed to investing in investment products from top to bottom. They are too optimistic about the opportunities brought by future consumption driven economy to individual enterprises, which will make the valuation of domestic textile and garment retail in a longer time.