Clothing And Textile: Recovery Is Still Weak, Recommend 13 Stocks For Your Reference.

1.1 exports: weak recovery trend continuation, superposition, depreciation, good and weak recovery, continuation: 13 years textile and garment industry export growth 11.4%, obviously better than 12 years. In the 14 year and 1-5 months, the export growth rate was 3.63%, and it is expected to increase by 8-10% over the whole year.

The signs of recovery in the US market are obvious: the sales of clothing and fabrics in the United States decrease from month to month after July 2011, and are slowly going to the inventory process. After 14 years, they are relatively stable, and 14 in April, 1.97.

ASEAN's export growth rate exceeds 40%, which has surpassed Japan to become the third largest market of China's textile and garment exports.

Through the Canton Fair, we can anticipate the export trend in the next 6 months. The volume of trading in the spring fair in 2014 dropped by 12.64%, and the decline was enlarged. The export data showed weaker than optimistic exports, which was mainly related to export policy, exchange rate factors and the transformation of trade mode brought by the electricity supplier.

RMB devaluation favorable export oriented enterprises: since mid February this year, the depreciation of RMB has lasted for more than 3 months, with a total depreciation of over 3%. The depreciation of favorable textile export enterprises, according to estimates, the exchange rate changes 1PCT per industry net profit of 4.5%, the current industry average net profit level is only 2-5%.

1.2 cotton price: Direct Subsidy Policy short It is expected that the total cotton output will remain at 80-100 cents / pound:

China's cotton imports have dropped from 40-50% in the past to around 20%, and the impact of foreign cotton is decreasing. The international market is more affected by supply and demand, and the pattern of global cotton supply exceeds demand. The direct subsidy policy will lead to a fall in domestic cotton prices. The short term 16800 yuan is the bottom line: in the future, domestic fine staple cotton will enter the merger period of cotton farmers' direct subsidy and reserve policy. In the process of pricing cotton gradually into the market, domestic cotton prices will enter a downward path in a certain period. In the short term, the minimum level of dumping reserve price of 17250 yuan and the state subsidized cotton price will be the benchmark for the domestic cotton price, which is calculated by the WTO yellow box agreement based on the direct subsidy price 19800- 3000=16800 yuan. At present, the price of grade 328 cotton is 17698 yuan, down 9% compared with the beginning of the year.

The difference between domestic and foreign cotton prices is expected to keep narrowing: the price difference in May dropped to 1080 yuan per ton, the lowest point in three years.

Two point one Industry as a whole The demand side has not improved. Some industries are going to inventory close to the end of the stock: the growth rate is slowing down, and some sectors are going to close to the end of inventory. In the past 11 years, the industry's highest inventory growth rate reached more than 30%, 12 years down to 15-20%, from 12 in November to a single digit level; in the 13 year, the apparel home textile plate inventories increased by 1% compared with 12 years, while the A share market in the leisure sector was the most obvious inventory, followed by the home textile industry.

Demand: maintain low position. In the past 2007-2011 years, the number of retail sales of major retail enterprises in China has increased by more than 20%. After 12 years, it dropped to 15-20% and 13 years to a single digit level. 14Q1 retail sales of all the major retail enterprises in the country increased by zero, a year-on-year increase of 5.4% in May, a marked increase from last month, but still lower than that of last year's 0.7PCT. The growth in May mainly came from the increase in prices (sales volume of -2%), and the trend of sales growth in April was higher than that in the first quarter.

Orders for some industries will improve. 4 orders will improve in autumn and winter, especially in sports and home textiles. Market for the home textile autumn and winter orders will be better reflected in the growth data is not strong, our analysis is mainly due to the terminal downturn, so that the rate of picking up the franchisee is not high, the statement revenue recognition is slower than the order will increase.

Men's clothing in 2.2 industries -- Nakakoku Toshiro took the lead in the turning point. At present, the men's clothing industry is still going to the inventory adjustment period, and the impact of anti-corruption has increased the length and intensity of the adjustment. Li Lang first took the lead in 2012, and now has the first turning point. The two orders in spring, summer, autumn and winter will continue to achieve positive growth and inventory turnover has reached 4-5 times.

In the general downturn of the industry, we believe that the model of Hai Lan's home is worth paying attention to: (1) the positioning of three or four line business men's clothing with a lower rate is larger, the market is bigger and the competition environment is loose, the marginal effect of opening shop is higher, and the discount of parity is not more popular in the background of economic downfall. (2) the whole industry chain that can hardly be duplicated is opened up, but the short-term corporate valuation is high.

Profitability: 13 years, Hong Kong men's men's net interest rate is higher than the A share brand, mainly because the Hong Kong stock market discount point is calculated at the expense, not directly to reduce revenue; A shares men's clothing part in 13 years to carry out inventory, gross profit is damaged, this year's rate is expected to be controlled. The net interest rate of A shares is the highest. Although the gross profit margin of the company is lower than that of other companies (low rate), the cost rate is also low, which mainly benefits from the high efficiency of the supply chain.

Store effect: Li Bang's store efficiency far exceeds other brands, mainly because the brand strategy of ribang is absolute high-end and quality, and the proportion of direct business and single store area is larger. A shares of Zhonglan Lan's home business has the highest store efficiency, mainly due to the larger single store area, higher SKU and higher product price ratio.

Inventory turnover: only in the case of Le Lang, the highest pressure on high-end brands (card NDI Road, Chinese clothing, Li bang, good news bird).

Women's clothing in 2.2 industries - performance is generally lower than expected three women's clothing companies 13 years of performance are lower than expected. Baozi has entered a mature period, the fundamentals continued to decline, the valuation center dropped to 5 times (the highest valuation was 35 times, corresponding growth rate was 56%; business diversification also affected the valuation).

Baozi's store efficiency is still the highest, and it is different from that of long. Kaiser shares fell sharply in the past 13 years, and now it has been reorganized into the concept of mobile games. The growth rate of long income is mainly due to the multi brand strategy and extension of the company, while the net profit growth rate is low because of the sharp rise in the cost rate.

From the perspective of operational capability, Baoji's inventory and accounts receivable turnover days have improved over the past 12 years, but they are still poorer than those of Leonid, and the inventory level of women's clothing industry is high.