Textile And Garment Sector Trend Analysis Recommended Attention To 6 Stocks

Market Review

Plate decline in October is ranked third in Shen Wanquan's first class industry decline.

By the end of October 31st, the Shanghai composite index was down 0.83%, Shenzhen composite index fell 2.41%, Shanghai and Shenzhen 300 fell 0.9%, and shwan textile and clothing index fell 3.55%.

Among them, the textile manufacturing sector rose by 2.1%, and the home textile home plate decreased by 4.73%.

On the stock market, the top gainers were Zhejiang rich (600070), Jiaxin silk (002404), Fujian Nanfang (600483), hang min share (600987), Lukang science and Technology (601599).

(002269), Luo Lai home textiles (002293), seven wolves (002029), nine Mu Wang (601566) and yeco Technology (002036), October

White horse shares were generally lower than those expected by the three quarterly report and the balance sheet is not ideal.

Three quarterly report summary 1) revenue growth and net profit growth decline, net interest rate dropped by nearly 2 percentage points: in 2012 1-9 months, the textile and garment industry listed companies operating income totaled 135 billion 400 million yuan, up 4.62% over the same period last year; net profit 9 billion 200 million yuan, down 19% over the same period; the growth rate declined compared with the same period last year, also declined compared with the two quarter.

Gross margins and net interest rates in the textile and garment industry were 22.7% and 6.77%, respectively, representing a decline of 0.65 percentage points and 1.99 percentage points over the same period last year.

2) brand clothing inventory and receivables rise, operating cash flow is not ideal: our focus on 18 brands of apparel enterprises, inventory / cost ratio rose faster in the three quarterly report, the same period last year inventory / cost ratio of 77%, this year's proportion increased 12 percentage points to 89%; and accounts receivable proportion of current assets is also rising, from 13% in the same period last year to three 16% this year.

Key data tracking 1) in September 2012, the sales of 100 major large scale retail enterprises increased by 7.8% over the same period in September 2012. 2) the retail sales in the Mid Autumn Festival and the National Day golden week increased by 8.49% over the same period last year; 3) the growth of China's textile and clothing exports was 0.54% in 1-9 months, and the export scale in the single month reached a record high.

November investment strategy 1) textile manufacturing: at present, textile manufacturing is not highly valued, and the performance of the whole industry has been lowered. In September, exports rebounded under the consumption stimulation of Christmas and Halloween in Europe and the United States, but whether or not it continued is still needed to be observed.

Cotton prices have stabilised near the reserve price, and chemical raw materials have dropped slightly. In the future, an important factor in judging the recovery of the manufacturing industry will be the steady rise in cotton prices after the rise in downstream demand. We believe that the price of cotton will continue to rise little and maintain the "neutral" rating of the textile manufacturing sector.

2) clothing home textiles: after pre adjustment, the valuation of the clothing sector is close to the bottom of history, and the attractiveness of the valuation of the plate gradually strengthens.

However, due to the unclear consumption recovery next year, there are not many catalysts in the near future.

Looking forward to the next 2 months, there are two factors in the industry's stock price or supporting factors: the cold winter caused the over expected sales of winter clothing, and the low base factor of the Spring Festival last year made the data rebounded this year.

Combined with the low valuation and poor fundamentals, the opportunity for the overall rise of the sector is not obvious. We downgraded the clothing home textile sector as a "neutral" rating.

Recommended portfolio. We recommend four stock portfolios in our fourth quarter strategy (Pathfinder (300005), card slave Road (002656), search special (002503), and nine herdwang) in the middle of 10, and the combined yield is 1.48%. In the same period, the textile and clothing index fell 1.57%, and the combined winning index was 3 percentage points.

In the light of recent stock price performance, we continue to choose some support for the whole year's performance, as well as the companies with a deeper decline in the early stage. In November, they were: Pathfinder, card slave road and seven wolves.

Medium and long term suggestions: Nine herd king, AOKANG International (603001), and Luo Lai home textiles.

1, November industry investment strategy: Valuation attractive, but lack of short-term catalyst.

1.1, maintain the "neutral" rating of textile manufacturing industry, and reduce the brand clothing industry to "neutral" rating.

Textile manufacturing: at present, the valuation of textile manufacturing is not high, and the performance of the whole industry has been lowered. In September, exports rebounded under the consumption stimulation of Christmas and Halloween in Europe and the United States. However, it is still necessary to observe whether we can continue or not.

Cotton prices have stabilised near the reserve price, and chemical raw materials have dropped slightly. In the future, an important factor in judging the recovery of the manufacturing industry will be the steady rise in cotton prices after the rise in downstream demand. We believe that the price of cotton will continue to rise little and maintain the "neutral" rating of the plate.

Clothing home textiles: after pre adjustment, the valuation of the clothing sector is close to the bottom of history, and the attractiveness of the valuation of the plate is gradually strengthened.

However, due to the unclear consumption recovery next year, there are not many catalysts in the near future.

Looking forward to the next 2 months, there are two factors in the industry's stock price or supporting factors: the cold winter caused the over expected sales of winter clothing, and the low base factor of the Spring Festival last year made the data rebounded this year.

Combined with the low valuation and poor fundamentals, the opportunity for the overall rise of the sector is not obvious. We downgraded the clothing home textile sector as a "neutral" rating.

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1.2, November recommended companies: Pathfinder, card slave Road, AOKANG international, seven wolves.

The four stock portfolios recommended by our fourth quarter strategy (Pathfinder, card NDI Road, search special, and nine herdmen) significantly outperformed the index in 10 months, with a combined yield of 1.48%, while the textile and apparel index fell 1.57% during the same period, and the combined winning index was 3 percentage points.

In the light of recent stock price performance, we continue to choose some support for the whole year's performance, as well as the companies with a deeper decline in the early stage. In November, they were: Pathfinder, card slave road and seven wolves.

Medium and long term suggestions: Nine Mu Wang, AOKANG international, and Luo Lai home textiles.

1.3, plate trend review: fear of the plate continued to spread, in October dropped third of the industry.

In October, the textile and garment sector fell third in Shen Wanquan's first class industry decline.

By the end of October 31st, the Shanghai composite index was down 0.83%, Shenzhen composite index fell 2.41%, Shanghai and Shenzhen 300 fell 0.9%, and shwan textile and clothing index fell 3.55%.

Among them, the textile manufacturing sector rose by 2.1%, and the home textile home plate decreased by 4.73%.

On the stock market, the top gainers were Zhejiang finery, Jiaxin silk, Fujian Nanfang, hang min shares and Lukang technology. The top companies in the company were United States apparel, Luo Lai home textiles, seven wolves, nine Mu Wang and Yi Ke technology.

Since the beginning of this year, the textile and garment sector ranks first in the whole market. By the end of October 31st, the Shanghai and Shenzhen 300 had dropped by 3.50%, while the Shen Wan textile and clothing index fell by 17.09%.

From the industry fundamentals, we believe that there are two main reasons: one is the backlog of clothing terminal inventory caused by the consumption downturn and the injury caused by discount sales to the whole industry; two, the uncertainty of overseas economic recovery and the loss of export orders caused the manufacturing enterprises to continue to decline in gross income and gross profit margins. At present, the trend has not yet been reversed.

Judging from the stock valuation, we believe that the overvalued clothing industry last year led to the demand for valuation bubble in the background of the end of this year's recession. Meanwhile, in the uncertain consumer environment, despite the valuation switch in the next three months, there is still uncertainty about the possibility of restoring the overvalued value in previous years.

This month's larger companies continue to be dominated by manufacturing enterprises, mainly due to a deeper decline in the early stage, resulting in a rebound in the three quarterly report. The costumes in the apparel home textile industry, which were the biggest in the decline, were affected by media reports. Due to the low expectations of the three quarterly report, the nine bru kings and seven wolves were affected by the order data.

1.4, relative valuation: textile and garment sector is located in the middle and lower reaches of the whole industry, and textile finishing is at the bottom.

Accelerated decline

Since 2004, China's textile and garment industry has a relative valuation of the overall level of A shares excluding the financial and petroleum and petrochemical industries. The average value of the total value of the total level of the A shares (excluding finance and petroleum and petrochemical industry) for the 12 years and 13 years is 16.3/13.7 respectively. The dynamic PE of the textile and garment sector is 14.35 and 11.66, respectively, and the relative valuations are 0.88/0.85 respectively. The data from last month's A continued to decline, and is now in the middle position of the whole industry.

In 2011, the textile manufacturing sector was valued 0.94 times, which was significantly lower than the historical average of 1.23 times. Although the downward trend in October has slowed down, it is still at the bottom of the consolidation state, and there is no reverse signal. The relative value of the apparel home textile in 2011 is 0.95 times, which has approached 0.91 times the historical mean month by month, and the relative valuation in October has accelerated downward trend.

2, 2012 three quarterly report: growth rate decline, operating indicators are not ideal.

2.1, revenue growth, net profit growth decline, net interest rate dropped by nearly 2 percentage points

In 2012 1-9, the total operating income of Listed Companies in textile and apparel industry rose 135 billion 400 million yuan, up 4.62% compared with the same period last year. Net profit was 9 billion 200 million yuan, down 19% from the same period last year. The growth rate declined compared with the same period last year, and also declined compared with the two quarter.

Gross margins and net interest rates in the textile and garment industry were 22.7% and 6.77%, respectively, representing a decline of 0.65 and 1.99 percentage points respectively over the same period last year.

From the three quarter single quarter situation, the industry's overall revenue and net profit growth were 47 billion 670 million yuan and 2 billion 890 million yuan respectively, the growth rates were -4% and -16% respectively, gross margin and net interest rate were 22.44% and 6.14% respectively.

In the sub sector, the home textile plate is significantly better than the textile manufacturing sector. The revenue growth is 6.24% and -3.13% respectively, the gross profit margin is 29% and 14% respectively, but the net profit growth rate of the two sectors has declined, the clothing has dropped 8.81%, and the textile industry has fallen 33.81%.

The top three sub sectors with the highest gross profit rate are men's clothing, home textiles and women's wear industry. The top three sub sectors with the highest net interest rates are women's wear, casual wear and men's wear industry respectively.

From the first half of next year, the order will lock in the first half of the year's income. In addition to the lower order outdoor and low end leisure industry, the order will be better.

At the same time, most men's clothing companies have a certain degree of reduction in the price of goods in the spring of 13 (3%-10%), and the overall growth of men's clothing orders will drop by 10-15 percentage points over the 12 years.

2.2, brand clothing inventory, receivable increased, operating cash flow is not ideal.

Due to the seasonal impact of autumn storage and the increase of accounts receivable due to centralized delivery, the cash flow of operating cash is generally deteriorating. The overall balance sheet in the three quarterly report is not ideal.

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In the 18 brand clothing companies we focus on, the inventory / cost ratio rose faster than the three quarterly. The average stock / cost ratio of the same year was 77%, and this year the proportion rose by 12 percentage points to 89%; and the accounts receivable accounted for the proportion of current assets, from 13% in the same period last year to 16% of this year's three quarterly.

In our opinion, the three quarterly report shows that the undesirable balance sheet is finally derived from the big economic environment background of terminal retail decline. In the environment of the decrease of people's flow in department stores and the decrease of consumer's willingness to consume, both direct and franchise stores have been out of the decline in current sales rate.

For the listed companies with a high number of franchisees, because the order will be locked in the same year order, the decline in the sales rate of the franchisee is necessarily reflected in the data of the franchisee's capital shortage and the reduction of the delivery rate. The pfer to the listed company level is bound to be an increase in accounts receivable.

Therefore, in the current market environment, the final reason for the deterioration of the balance sheet of listed companies is the consumption slump caused by the economic downturn. Meanwhile, China's clothing (000902) industry oriented ordering system makes the general terminal management ability of Brand Company poor and the reaction speed is not enough. This is also an aspect of the brand clothing industry being questioned by the market.

3, the operation of the industry

3.1, export: export stabilization, export scale reached a record high in September.

In October, the General Administration of Customs announced the latest situation of China's foreign trade in the first three quarters, and the export stabilization signal was obvious in September.

In the first three quarters, China's total exports amounted to US $1 trillion and 490 billion, up 7.4% over the same period last year.

Textiles, clothing,

Exports were 710.5, 1160.6 and 34 billion 630 million US dollars respectively, representing an increase of 0.2%, 0.7% and 9.5% respectively.

From a single month, exports of US $186 billion 350 million in September, an increase of 9.9% over the same period last year, and export scale reached a record high.

Exports of textiles, clothing and footwear were 85.4, 165.8 and 4 billion 250 million yuan respectively, representing an increase of 7.48%, 10.31% and 14.8%, respectively. The growth rate was significantly higher than that of the previous month (the growth rate in August was -3.78%, -3.13% and 5.88%).

We believe that the apparent stabilization of exports in September is not only affected by the eight measures that the State Council has introduced, including export rebates, export credit insurance and trade financing, but also the relatively low base of last year and the consumption rebound caused by the European and American Thanksgiving and Christmas double sections at the end of the year.

3.2, domestic sales: in the first three quarters of 2012, the total retail sales of all major retail enterprises in the country increased by 11.20%

In September, the prices of new clothing in the autumn and winter went up, and prices rose significantly. According to the National Bureau of statistics, the consumer prices of clothing commodities rose by 3.7% in September and 2012, the highest since May.

In the economic downturn, faced with higher clothing prices and rising levels, residents' consumption is obviously more cautious, coupled with the relatively high growth rate of the same period last year, the growth rate of clothing sales has declined this month.

According to the statistics of clothing sales of hundreds of major retail enterprises in China, the retail sales of clothing commodities increased by 10.62% over the same period last year, slowing by 6.10 percentage points from the previous month, the lowest year-on-year growth rate since March this year in September.

In the past three quarters, the cumulative growth rate of apparel retail sales was 11.20%, 0.54 percentage points lower than the cumulative growth rate in the first half of this year, 10.8 percentage points lower than the same period last year.

In terms of retail volume, the volume of retail sales of all kinds of clothing in 100 major retail enterprises increased by 1.06% over the same period last year, and the growth rate slowed down by 3.97 percentage points from the previous month in September.

From the cumulative growth rate, the volume of clothing retail sales increased by 1.70% in the 1-9 months, which is 5.06 percentage points lower than that in the same period last year.

According to the product category, the retail sales volume of women's clothing, children's wear and sportswear increased by 100% in September.

Among them, the sale of women's clothing was relatively good, an increase of 3.58% over the same period last year, an increase of 0.02 percentage points over the same period last year.

4. Key data tracking

4.1, industry key data

In September 2012, sales of 100 major large scale retail enterprises increased by 7.8% over the same period last year (source: China National Business Information Center).

In September 2012, the number of retail sales of 100 major large-scale retail enterprises increased by 7.8% over the same period last year, and the retail sales of 100 major large retail enterprises in the three quarter increased by 7.88% over the same period last year.

Among them, clothing retail sales grew by 10.62% over the same period last year, slowing by more than 10 percentage points over the same period last year, slowing 6.1 percentage points from last month.

In the past three quarters, the cumulative growth rate of apparel retail sales was 11.20%, 0.54 percentage points lower than the cumulative growth rate in the first half of this year, 10.8 percentage points lower than the same period last year.

In September, the retail sales of all kinds of clothing in 100 major large retail enterprises increased by 1.06% compared with the same period last year. The sales of women's wear were relatively good, up 3.58% from the same period last year, representing an increase of 0.02 percentage points over the same period last year.

In 1-9, retail sales of clothing increased by 1.70% over the same period last year, 5.06 percentage points lower than the same period last year.

2012 Mid Autumn Festival, National Day Golden Week retail market sales grew 8.49% year-on-year (source: China National Business Information Center)

According to the survey of the China National Business Information Center, during the Mid Autumn Festival and the National Day golden week in 2012, the retail sales volume of 100 large retail enterprises increased by 8.49% over the same period last year. In recent years, the sales growth rate of the eleven golden week was below 10% for the first time.

Of the 100 large retail enterprises surveyed, 66 large retail enterprises had sales growth below the overall 8.49% growth rate, and 39 of the large retail enterprises sold less than the same period last year, showing a negative growth year-on-year.

In terms of main categories, retail sales of food, clothing and cosmetics grew by more than 10% year-on-year, 13.24%, 15.23% and 17.69% respectively, while sales of household appliances, jewelry, and other products were relatively low, 1.3% and 2.42% respectively.

From the sales statistics, the sales growth of Mid Autumn Festival was higher than that of the previous year. In 2012, the retail sales of Mid Autumn Festival increased by 52.54% compared with that of last year's Mid Autumn Festival, while sales growth of the seven day of the National Day was sluggish, and the retail sales increased by only 3.06% over the seven day of the same period last year.

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(1-9) China's textile and clothing exports grew by 0.54% (source: General Administration of Customs)

According to customs statistics, the total value of China's imports and exports in the first 3 quarters of this year was US $2 trillion and 842 billion 470 million, an increase of 6.2% over the same period last year.

Among them, exports amounted to 1 trillion and 495 billion 390 million US dollars, an increase of 7.4%; imports of US $1 trillion and 347 billion 80 million, an increase of 4.8%; and a trade surplus of US $148 billion 310 million.

In September, the total value of China's imports and exports was 345 billion 30 million US dollars, an increase of 6.3%.

Among them, exports of US $186 billion 350 million, an increase of 9.9%, a month's export volume reached a record high; imports of 158 billion 680 million U. s.dollars, an increase of 2.4%; trade surplus of $27 billion 670 million.

From the perspective of export commodities, textile and clothing exports increased slightly.

In the 1-9 months, the export of textile products increased by 0.54%, of which clothing exports amounted to 116 billion 60 million US dollars, an increase of 0.7%; textiles 71 billion 50 million US dollars, an increase of 0.2%; footwear 34 billion 630 million dollars, an increase of 9.5%; furniture 35 billion 100 million dollars, an increase of 30.1%; plastic products 23 billion 20 million dollars, an increase of 23 billion 20 million; bags and dollars, growth figures; toy dollars, growth.

4.2, raw material prices: cotton prices rose slightly, chemical fiber prices fell slightly.

Cotton prices rose slightly this month, and domestic 328 cotton spot rose 0.28%, closing at 18709 yuan / ton; Cotlook:A cotton price rose 0.8%, closing at 80.9 cents / pound.

Polyester and viscose prices were mainly small, with a decrease of about 2.5% and 3.5% respectively.

5. Announcements and comments of key companies

Pathfinder (300005) three quarterly report 2012

In 2012 1-9, the company achieved operating income of 624 million yuan, an increase of 45.27% over the same period, and the net profit attributable to the parent company was 81 million 340 thousand yuan, an increase of 51.16% over the same period last year.

Comments: the company's autumn and winter 2012 and spring and summer orders in 2013 increased by 60.65% and 50.49% respectively, and the price of products in the spring and summer of 2013 decreased by 25%, which is more competitive in the relatively low consumption market.

Our EPS for 12-14 years was 0.50, 0.78 and 1.21 yuan respectively (income tax calculated in 25%), corresponding to 12-14 years of PE being 37, 24 and 15 times, respectively, to maintain the "buy" rating of PE.

Search for (002503) three quarterly report 2012

In 2012 1-9, the company achieved operating income of 1 billion 112 million yuan, an increase of 49.27% over the same period, and the net profit attributable to the parent company was 176 million yuan, an increase of 58.31% over the same period last year.

The company expects full year net profit margin of 40%-70

Comments: as the company's order will account for about 90% of the annual revenue and basically lock in the annual performance, we expect the company's annual revenue growth to be over 50%.

In 2012, as the company's "management year", it has been continuously upgrading in the aspects of internal management, brand promotion and product R & D design. The number, area and quality of terminal stores have been steadily raised, and the company's 2012-2014 years' EPS is 0.91, 1.29 and 1.76 yuan, corresponding to 12-14 years PE 27, 19 and 14 times, maintaining the "buy" rating.

The 002612 quarterly report 2012 (three)

In 2012, the company achieved operating income of 782 million yuan in the first three quarters, an increase of 26.1% over the same period, and a net profit attributable to the parent company of 208 million yuan, up 41.15% over the same period last year.

The company expects annual net profit to change by 20%-50%.

Comments: we believe that the company as the only multi brand high-end women's clothing in the A share market, has two points in the short and medium term growth: first, the development of new channels in the future, the development of the new channels of Rhine, the new channel and the continuous increase of the single store income and gross profit margin brought by the existing channel "joining the direct battalion"; two, in the multi brand construction, the less lady dress Marian Mary industry is more spacious, and the little Shu brand is expected to become a new growth point in the next few years.

It is estimated that the EPS of -2014 in 2012 is 1.51 yuan, 1.95 yuan and 2.61 yuan respectively, while CAGR is 36%.

At present, the stock price corresponds to 12-14 years PE, which is 20.8 times, 16 times and 12 times respectively, maintaining the "overweight" rating.

Carlo NDI Road (002656) three quarterly report 2012

In the first three quarters of 2012, the company achieved an operating income of 395 million yuan, an increase of 38.27% over the same period last year. The net profit attributable to the parent company was 93 million 330 thousand yuan, an increase of 61.78% over the previous year, and the earnings per share were 0.99 yuan.

The company expects annual growth of 40-60%.

Comments: the company's spring and summer orders in 2013 increased by 26%, and 120 stores opened each year in the next two years. The expansion rate was accelerated after the launch. Meanwhile, the new store began to contribute to its performance. The EPS of the Forecast Ltd for 12-14 years was 1.66/2.15/2.78 yuan, corresponding to 12-14 years PE 24.9, 19 and 15 times, respectively, to maintain the "buy" rating.

AOKANG International (603001) three quarterly report 2012

In the first three quarters of 2012, the company achieved operating income of 2 billion 457 million yuan, an increase of 21.62% over the same period last year, operating profit and net profit were 4.75 and 367 million yuan, respectively, up 38.22% and 17.21% respectively, and the basic earnings per share were 1 yuan.

After 1-9 months, net profit increased by 37.7%.

Comment: as the leading brand of men's leather shoes, the company has 5 brands of AOKANG and Kanglong, fiery red bird, beautiful beauty and Wanli. The leading position of brand influence and market share is relatively stable, and the order volume increased by nearly 30% in 2012.

Considering the listing of Companies

Publicity and terminal channel advantages to develop multiple brands, maintain EPS2012/2013/2014 after diluted 1.41/1.77/2.3 yuan, "overweight" rating.