Spun Apparel Industry Chain: Improvement Of Export Risk

Textile and clothing

Downstream, consumers are directly upstream of polyester, spandex, viscose, dyestuff and other industries, specifically corresponding to four subdivision industrial chains: 1) oil, natural gas -PX-PTA- polyester - Textile and clothing; 2) oil, natural gas pure MDI (PTMEG) - spandex - Textile and apparel; 3) cotton pulp (lye solution, bamboo pulp) - viscose staple fiber - clothing and clothing.

4) petroleum - diphenyl two amine / H acid disperse dyes / reactive dyestuffs - Textiles and garments.

Textile and clothing: export recovery has driven textile manufacturing out of the trough, clothing is still in the adjustment period.

1) industry risk characteristics.

China's textile and clothing are mainly located in production and manufacturing, as well as middle and low end brand operation.

In addition to the domestic market, external demand is also a key factor affecting the prosperity of the industry. The textile industry basically has no bargaining power on upstream raw materials, and its profitability is weak.

In terms of financial performance, the industry is generally small in scale, weak in profitability, moderate in debt, moderate in liquidity and low in operating capacity.

Overall, textile and garment industry has a poor credit quality across the cycle.

2) the operational risk of textile manufacturing industry has gone out of the bottom of the big cycle and needs to recover.

With the recovery of overseas demand, the performance of the textile industry continued to rebound in the fourth quarter of 2012. The first half of this year was affected by the base effect, and the growth rate of revenue and net profit was lower than that of the same period last year.

We believe that the textile industry has gone out of the bottom of the big cycle, but the recovery may have to wait until 2015.

Logic: 1) the policy of direct subsidy for Xinjiang cotton is short and long.

The direct subsidy scheme will come back, and cotton will return to the market. After 9-10 months of new cotton listing, cotton prices will still fall.

2) the downstream cotton spinning enterprises have a small demand for stock replenishment at present, and are mainly in the state of buying and using. Therefore, enterprises can reduce the adverse impact of cotton price drop on gross profit through pricing changes and maintain stable profitability.

3) it is expected that cotton prices will rebound steadily next year, leading to a rebound in the boom of the textile sector.

3) clothing: it is still in the stage of shrinkage adjustment.

After 2012-2013 years and two years of inventory, starting from the end of 13, inventory will return to the rising channel.

Most enterprises are faced with the difficulty of developing traditional channels of growth, which are supported by channels, which are difficult to continue in the future, and the path of future joining and self-supporting, online and offline collaboration.

4) textile manufacturing Voucher: leading enterprises have a high margin of safety.

The textile industry has no premium capability for upstream. The key to profitability lies in cost control and upgrading of product structure. Therefore, enterprise scale and technology are very important. Leading enterprises have a high margin of safety, and recommend the Wei Qiao venture group, Wei Qiao textile and wool spinning leading sunshine group because of nearly 50% of their income from photovoltaic and real estate, the risk is higher.

Chemical fiber spandex and polyester.

1) the credit cycle of chemical fiber industry is poor.

The overall competitiveness of the chemical fiber industry is fierce, and the product premium rate is low. At the same time, the impact of the macro economy is relatively large. The profitability and stability of the industry are weak, and the credit quality of the cross cycle is poor.

2) spandex industry - stable operation in the first half of the year and continued upward trend in the medium term.

In 2013, the downstream demand of the spandex industry picked up about 30%, and the spandex industry began in the early 2014.

Smooth operation and stable market prices.

The average price of spandex and the price of raw materials have been weakened, and the profitability of the industry has picked up.

The future growth of the spandex industry is expected to remain at 7-10%, with less capacity in the 2014-2015 year and better supply and demand in the medium term.

3) polyester industry: long-term losses, falling costs, improving profits, business cycles

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The polyester industry has been losing money since 2012. From the fourth quarter of last year, the demand for European and American markets has improved, coupled with the slowdown in the growth of domestic production capacity, the supply and demand structure of Dacron industrial yarn has been improving.

In the short term, the price of PTA will remain low, and the new capacity of the polyester industrial yarn industry will be limited. The prosperity of the polyester industry is expected to continue.

4) the main body of the ticket recommends Huafeng Group and Hengyi group.

Dyestuffs -- textile chemicals.

1) the credit quality of industry across cycle is high.

2) in the first half of the year, oligopoly and environmental protection tightened, and the supply of dyes continued to boom. The environmental protection was tightened and the supply of acid was compressed.

3) the supply and demand pattern of disperse dyes is reversed.

4) the pfer cost of downstream costs is stronger than that of supporting dyes.

5) disperse dyes continue to boom and the price of reactive dyes is difficult to sustain.

6) the main body of the coupon recommends Zhejiang Longsheng and Chuan Hua shares, but the valuation appeal is poor.

Risk warning.

Textile manufacturing external demand

As expected, cotton prices plummeted and the domestic economy plummeted.