A Survey Of Textile Shoes And Clothing Clusters In Fujian

In the early stage, we carried out research on the current situation of Fujian's textile and garment industry cluster.

Generally speaking, retailers of sports and casual wear brands can still get gratifying performance this year, and the development of sports brands is more optimistic than casual clothes. The fabric printing and dyeing suppliers are different in the middle reaches, and the cost and cost pressure are the main bottlenecks of such enterprises. Export enterprises are experiencing severe winter. The main task of this year will be "ensuring no loss" as the first goal, and the order and investment speed will slow down.

The negative impact of macroeconomic slowdown on enterprises is beyond doubt.

The root is the rise of raw materials, fuel power prices and labor costs.

On the other hand, the tight capital also makes the proportion of the upstream downstream enterprises increasing.

While domestic sales are booming, export sales are not optimistic.

Influenced by the accelerated appreciation of RMB and the increase of production costs, export oriented enterprises tend to spend the winter hibernation.

Although the macroeconomic operation pressure is high, the prosperity of the cluster is still higher than our pessimistic expectations: 1, the local brand clothing enterprises are or have explored a suitable brand operation and development road, and the degree of consumer recognition is constantly improving; 2, the target customers are mainly domestic market, especially the two or three line market, which are relatively less affected by export and large market capacity. 3, the scale effect of industrial clusters has saved the production cost of enterprises to a certain extent, reduced the cost of production and relieved the cost pressure; 4, enterprises have united and help each other to create a good development environment.

We believe that many of the root causes of the industry now come from macroeconomic changes.

For the operation of a single enterprise, our basic view is that demand is not the main problem, orders are still very full; cost, cost and capital pressure are the core difficulties; policy instability and macroeconomic uncertainty are bigger bottlenecks for export enterprises; slowing down investment and expansion speed is the choice of most enterprises.

According to the survey, we list five important aspects of enterprise management under the current macro background: downstream consumption demand, cost pressure, cash flow adequacy, product bargaining power and sub industry boom.

According to these five standards, the 5 listed companies were graded according to the survey. The investment opportunities ranged from big to small in order: seven wolves, Zhonghe shares, xunxing shares, Phoenix Bamboo textile and plum blossom umbrellas.

On 17 -6 June 11, 2008, we conducted a survey on the status of textile and garment industrial clusters in Fujian, and visited and investigated five local listed companies and two non-listed company.

Generally speaking, we believe that the retailers of sports and casual wear brands can still get gratifying performance this year, and the development of sports brand is more optimistic than that of casual wear. The fabric printing and dyeing suppliers are different in the middle reaches, and the cost and cost pressure is the most important bottleneck for such enterprises. The enterprises that can effectively control the cost cost perform better, and export enterprises are experiencing severe winter. This year's main task will be "ensuring no loss" as the first goal, and the order and investment speed will slow down.

The current situation of Fujian's textile and apparel industry cluster is Fujian, where leisure (business casual, T-shirts) and sportswear brand distributors are very concentrated. There are numerous brands of local brands, and there are also a large number of brand service companies.

In sports brand, Anta belongs to the first echelon and is the target of competitors. XTEP, Hongxing Erke and 361 degree are the second tier companies.

In the leisure brand, influenced by the trend of leisure consumption of the residents' clothing, the seven wolves, nine herdmen, Jin Ba, Li Lang, Qipai and so on all have good performance. Brand operation is also getting better and better, and gradually find their own reasonable market positioning and development mode.

Although these brands are slightly subdivided in market positioning, there is little difference between brand awareness and reputation, and competition is still fierce.

What is admirable is that they did not appear vicious competition because of high homogeneity. Instead, they helped each other, and the market did not become a "zero sum market".

With the rapid development of brand clothing enterprises, the supporting industries have also developed smoothly.

Due to the strong demand for fabrics and suitable geographical conditions, nearly 1000 fabric production enterprises have been produced locally, with different sizes and characteristics and advantages.

Some enterprises are mainly based on the Fujian market, and a few enterprises have begun nationwide layout.

In addition, there are several large excipients manufacturing enterprises. Basically, accessories such as zippers, buttons, shoes and plastic shoes and shoes can be conveniently purchased locally.

The improvement of relevant supporting industries has greatly reduced the cost of searching in the course of enterprise development.

Of course, this year's macroeconomic slowdown has no doubt about the negative impact of business.

In particular, a large number of export enterprises and a number of small domestic enterprises have stopped production, closed down or sought to pfer.

The root cause is the rise of raw materials, fuel power prices and labor costs, making such small profits enterprises difficult to continue their basic production operations.

On the other hand, the shortage of funds is another difficult problem facing enterprises. Especially, the proportion of the upper reaches of the upstream enterprises is gradually increasing, and the more money they go up, the more serious the funds are occupied, which is reflected in the lack of cash flow in the financial statements.

While domestic sales are booming, export sales are not optimistic.

Affected by the accelerated appreciation of RMB and the increase of production costs, export enterprises inevitably entered a severe winter. How to survive the winter became their first consideration.

Careless orders or faster investment are considered to be big taboo this year, which is likely to lead to a more difficult business.

Fortunately, most of the enterprises in Fujian still focus on domestic sales, and the economic environment of the whole industrial cluster is still in a virtuous circle. The possibility that the capital chain is broken due to the adverse sales returns and the possibility of spreading to the upstream and downstream enterprises is not large.

From the current situation of Fujian's textile and garment industry cluster, although the macro-economic operation pressure is bigger, its prosperity and prosperity is still higher than our pessimistic expectations: 1, the local brand clothing enterprises are or have explored a suitable brand operation and development road, the consumer recognition is continuously improving; 2, the domestic market, especially the two or three line market, is relatively less affected by export and the market capacity is large; 3, the scale effect of the industrial cluster has saved the production cost of enterprises and saved the cost pressure to a certain extent; 4, the enterprises have united and helped each other to create a good development environment.

Investment opportunities, we believe that many of the problems facing the industry now come from macroeconomic changes.

The impact on enterprises is due to the ability of enterprises to resist risks, mainly in the aspects of capital and cost advantages, bargaining power, management level and so on.

For the operation of a single enterprise, our basic view is that demand is not the main problem, orders are still very full, cost, cost and capital pressure are the core difficulty policy instability and macroeconomic uncertainty. It is the choice of most enterprises for export enterprises to slow down investment and expansion speed. The whole industry cluster still shows prosperity and mutual support and better development. According to the understanding of the industrial clusters, we list five important aspects of enterprise management under the current poor macroeconomic background: downstream consumption demand, pressure to bear, cash flow adequacy, product bargaining power and sub industry boom.

And according to these five standards, the scores of the 5 listed companies are listed in order to find investment opportunities.

The results ranged from big to small in order: seven wolves, Zhonghe shares, xunxing shares, Phoenix Bamboo textile and plum blossom umbrellas.

The company's investment point is 002029 wolves company advantage as a casual wear brand retailer. The company has developed rapidly in the past three years. It mainly relies on brand operation and store expansion, and adopts the sales mode of agency based sales, and implements the pricing method of cost plus.

With the improvement of brand awareness and reputation, and on the basis of accumulating certain brand operation experience, the company gradually began to increase the proportion of direct business and store scale, and the brand series and commodity category also became more diversified.

We believe that in the process of rapid development, the company has maintained a correct understanding of its brand positioning and development direction, and has also taken more consideration of its own bottlenecks.

Overall, the brand operation of the company is becoming better and better. It has become the biggest guarantee for its further development, and has also enhanced our confidence in the company's continued rapid development.

Investment point sales, the company's early shipment and receivables in the 1 quarter, so that sales revenue growth of 141.9%, the company expects the first half net profit to get 100%-150% growth, from the current sales situation will not change this expectation.

But the company also said that with the gradual deliveries in the 3 and 4 quarter, it is expected that the annual growth rate will be less than 100%. We think this is also a normal phenomenon.

It is understood that the company's 2007 additional projects (mainly for store expansion) has been completed more than half, is expected to be completed by the end of the majority, due to the company's stores opened faster than expected, so it has increased the number of future expansion of the store's expectations, sales revenue growth has also increased accordingly.

In view of the prudence principle, the new stores choose more mature business circles and prime locations, plus brand operation, so that new stores can generate benefits in the short term.

New stores are still mainly represented by agents, agents can get orders after they get the qualification, and for the company, delivery can confirm revenue. Therefore, the time for new stores to generate benefits is greatly reduced, thus becoming a guarantee for rapid revenue growth.

In the process of field research, we found that the flagship store (life hall) in Fujian has begun to create a family shopping atmosphere. The product range extends to children's clothing and women's clothing. Although the total amount is not large, it does not occupy an important proportion in sales revenue, but it shows that the company's brand operation has begun to rise to a new level.

From the local sales situation, the degree of consumer recognition is high.

With the change of people's consumption preferences, sportswear clothing has gradually become a new hot spot for residents' clothing consumption, but at the same time, there are also many competitors.

The company always thinks that "wide distribution points and rich network channels" can get more market opportunities in the fierce competition of casual wear market, and the expansion of stores will continue to be the focus of the company's development this year.

We expect that if the additional projects can be completed ahead of the end of the year, the number of stores will be increased by 820, to a total of 2796, of which 20 will be completed in the form of lease to avoid the risk of fluctuations in real estate prices.

Because in the downstream of the industrial chain, the company is not sensitive to the rising cost pressure because it has enough capacity to pass on.

The occupation of funds is also in the normal range, and the financial burden is small.

Of course, this year, the company will not change its usual sales mode and pricing strategy. It will still take 60 percent off discount sales to agents and use the cost plus pricing method to ensure that the gross margin level is stable.

According to a quarterly report, we expect gross margin to remain at 36% level throughout the year.

The risks faced by the company are mainly due to concerns about the consumer's ability to consume and the difficulty of improving the speed of management to match the speed of expansion of enterprises.

The main reason is that the increase in inflationary pressure will lead to an increase in other consumer spending, and squeeze out some clothing consumption expenditure, while homogeneous competitors are numerous, so the company will be more cautious in raising prices.

With the sales scale and number of stores reaching 870 million and more than 2000 new stages, the company's brand operation efficiency and management level also put forward higher requirements. The bottleneck of the development of enterprises is not the ceiling of the number of stores, but also the degree of cooperation from more enterprises themselves.

According to the survey results, we have slightly increased the profit forecast: 2008