Textile And Garment Industry, Medium Term Outlook, Picking Up Stocks And Long-Term Layout.

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Listed companies in 2012 analysis: (1) manufacturing listed companies operating income, net profit and gross profit margin generally declined compared with the same period last year, and the two quarter improvement is very limited in the first quarter. (2) the profit growth of the listed companies of brand listed companies basically met expectations, but the growth rate was lower than that of the same period last year. At the same time, the growth of single quarter revenue of some companies in the second quarter has slowed down compared with the first quarter, and the gross profit margin has benefited from the adjustment of product structure and the decline of raw material prices, which has increased year on year.

But the quality of earnings has generally declined, and almost all companies' operating cash flow has deteriorated due to a decline in inventory and receivables turnover.

In the first half of the year, brand retailers generally suffered from heavy pressure (1) the same store growth generally slowed down, and there was no increase or even a slight decrease.

(2) there are obvious differences in the retail data of different levels of cities, and the three / four line is generally better than the one / second line.

(3) in the autumn and winter of 2011, there was a slight pressure on the sales rate, and the pressure was greater in spring and summer in 2012.

(4) the profitability of dealers or franchisees has declined, and (5) the slow pace of net shop opening has opened up quite a lot.

It is noteworthy that the supply of high-quality social channels has gradually increased, and prices are showing signs of loosening.

Brands offer a certain opportunity.

Analysis of the situation in the second half of the year: manufacturing listed companies are unlikely to improve their orders significantly in the three quarter of 2012, especially the European market has not shown signs of improvement, but considering the reasons for raw material inventory digestion and the same period base, we expect that the decline in revenue and gross margin will converge.

For brand listed companies, taking into account the growth rate of orders in the spring, summer, autumn and winter of 2012, we expect most of the brand listed companies to grow less than the first half of the year, and gross margin will continue to rise year-on-year, and annual net profit growth is generally higher than that of revenue growth.

Medium term outlook for the industry (1) manufacturing listed companies expect longer adjustment time and overseas pfer of orders will continue.

In the long run, we believe that the entire Chinese textile manufacturing industry will only maintain the core technological links at the end, and the simple rough processing will gradually be pferred overseas. After the industry shuffle, a small number of manufacturing leading enterprises with technological R & D, scale advantages and management advantages will have a rebound in profitability because of the improvement of ecological environment.

(2) the simple profit margins of brand listed companies will end and the future differentiation may intensify.

From another perspective, considering the overall capacity of China's clothing and consumer market, the differentiation and maturity of different subdivision areas, and the gradual promotion of urban consumption upgrading at different levels and the overall improvement of China's national strength, we believe that the stage of the emergence of some super large indigenous Brand Company has gradually come into being. The current industry readjustment is an important observation stage, and it is also a critical stage to gradually widen the gap between similar companies.

We maintain a "neutral" rating on the industry as a whole, and the manufacturing listed companies are not optimistic, unless the renminbi depreciates significantly.

For brand listed companies, 2012 is a terminal digestion and adjustment year. In the three quarter, it is difficult to generate exciting data for the industry terminal. Weather is an important variable in the fourth quarter. If the fourth quarter terminal is revived, the key companies whose valuation depth is adjusted is expected to rebound.

If the terminal is still sluggish in the fourth quarter, the industry sector will continue to shake the adjustment trend as a whole.

Recent suggestions are concerned about the seven wolves (002029, buy), the nine Mu Wang (601566, stock bar) (601566, buy), AOKANG International (603001, stock bar) (603001, overweight), the long position stock (002612, stock bar) (002612, overweight), and the wedding bird (002154).

We expect the popular American dress (002269, stock bar) and public entertainment.

The company is expected to become an offensive variety in 2013.