Investment Strategy Of Textile And Garment Industry In 2009

Textile and garment industry investment strategy in 2009. In 2009, the growth of clothing consumption in the domestic market is expected to drop to around 10%.

In October this year, the growth rate of domestic clothing consumption broke through a steady upward trend in 1-9 months, and dropped to the level of unit numbers. The impact of the two day holiday and the warmer weather on the sale of new clothes in autumn and winter have also been reduced to 11-12% level.

We expect that in 2009, the growth rate of clothing consumption in China will decline to over 10% from 15% in 2008 (the nominal growth rate of clothing consumption at 2002's lowest point is 10.2%) in the last round of the economic downturn.

In 2009, the growth rate of brand clothing retailers is expected to be less than 5%.

Only a company with strong brand competitiveness and good management will be able to get endogenous growth rate of about 5%, while zero growth or negative growth will be more common.

The growth rate of individual stores depends on the ability of the surrounding residents to pay. Therefore, we use the per capita nominal consumption expenditure growth rate (5%) of urban residents as the basis for endogenous growth.

The industry is expected to grow steadily. There is still much room for development of clothing consumption in China. Clothing consumption has a good defensive function in the economic downturn cycle, especially sports and leisure wear categories.

In the last round of the economic downturn, the growth of clothing shoes and hats was relatively stable, roughly equal to the food category, higher than that of gold and silver jewelry and tourism growth.

The international comparison of per capita consumption level shows that there is huge room for improvement in per capita consumption and consumption.

From the point of view of price level, defensive ranking is medium, low grade and high grade. The low price brand is ranked in the middle gear after the fear of price war.

Simple price can not decide the purchase intention of consumers. We are optimistic about the brand positioning of "high cost performance".

Upstream and export related industries (textile, printing and dyeing, garment processing, etc.): it is difficult to boost in the medium and short term, and the growth rate slowed down to the level of unit numbers or even negative growth in 2009.

The two short-term factors favorable to exports in 2009 are the increase in export tax rebates and the slowdown in Renminbi appreciation. The former is mainly reflected in one-off subsidies, which can improve the competitive advantage of China's export products to a certain extent.

However, under the trend of shrinking foreign market demand, it is difficult to reverse the difficulties in order growth, tight capital turnover and declining profit margins.

Our leisure clothing consumption market now has a total level of 456 billion yuan, which is 9 times that of the sports market.

The pace of work and life of modern people has been quickening. Because of the need to release the mood, the trend of dressing is becoming more and more individualized and leisure oriented.

Casual clothing has become an increasingly respected dress pattern in the international consumer market, reflecting a fashion of leisure, humanism and nature.

With the improvement of Chinese consumers' consumption ability, the speed of international information exchange is faster, and the boundaries between all kinds of garments are becoming more and more blurred.

If China's economy is adjusted, it will have an impact on any industry.

Casual wear is relatively inexpensive, and the economic cycle is lower than the expensive high-end or luxury clothing.

Leisure Brand Company try to provide consumers with fashionable products at a popular price. Although the prices of high time products are relatively high, compared with foreign brands, domestic leisure Brand Company still has a price advantage.

Unless macroeconomic fluctuations are very large, the impact of the economic cycle on domestic leisure companies will be relatively limited.

Benefit from the trend of living and dressing, the growth and defensive performance of sportswear and casual wear will be better than that of shoes, formal dress and fashion.

Sports apparel consumption growth in 2009 is expected to maintain about 20% of the level, casual wear is expected to maintain about 12% of the level.

The investment strategy is to give the downstream "neutral" and "upstream" investment rating, and recommend the selected companies.

When the economy is booming, excellent clothing brand operators can get high growth. When the economy is facing downside risks and consumer expectations are slowing down, we believe that excellent clothing brand operators can still get higher retail growth than the average market.

At present, the brand competition of Chinese clothing (000902, stock bar) is in the "excellent" selection process, and the performance of the brand clothing company will be differentiated. Excellent companies are expected to maintain a good growth rate and gradually step out of the rising market independent of the big market.

In the process of economic downturn and slowing down of consumption growth, although the growth rate of the excellent Brand Company will decline, it can still gain higher growth than the market average. Appropriate market positioning, marketing strategy and channel management can make it gain a higher market share.

Textile enterprises in the upper and middle reaches are not optimistic.

We have a cautious and optimistic attitude towards the excellent clothing brands in the lower reaches, and give "avoid" investment suggestions to the textile enterprises in the upper and middle reaches.

However, investors should pay attention to the risk of declining valuation because of the high valuation of Growth Company in the early stage of the market.

What should be pointed out is that when the macroeconomic situation improves, consumer confidence is lifted and the market stabilizes, the growth rate of quality apparel Brand Company is expected to increase significantly, and the investment value will be re examined, which is expected to rebound before the big market.

Companies with low upstream and export categories are equipped with premium sports and casual wear Brand Company.

Hong Kong shares focus on sports brand investment opportunities.

A shares focuses on leisure brands' investment opportunities, such as the seven wolves (002029, stock bar) (2009 slow growth in the first half), and American Apparel (002269 market, stock bar) (high valuation and liquidity risk caused by small circulation market value).

The replacement value of YOUNGOR (600177, stock bar) is higher than the market value, and the dividend yield is high, which is a typical value investment opportunity.

Editor in charge: Yang Jing