Textile And Garment Industry: Pay Attention To Stock Valuation Switching Opportunities

Industry operation: domestic and foreign cotton prices continued to fall in October, and domestic and foreign cotton prices narrowed sharply.

In the long run, the domestic price is going to be marketization, and the price of domestic cotton is expected to gradually integrate with the cotton trade, which will benefit the long-term development of the cotton textile industry in the long run.

Main points of investment:

In October, the industry slightly outperformed the market.

In October, the Shanghai Composite Index, Shenzhen Composite Index and Shanghai and Shenzhen 300 rose by 2.38%, 1.8% and 2.34% respectively.

Shen Wan textile and garment sector rose 2.49% overall, slightly outperforming the market, of which textile manufacturing and apparel home textiles rose 0.65% and 4.27% respectively.

In the textile and garment sub sectors, casual wear and silk rose considerably, rising by 7.83% and 5.46% respectively.

Industry operation: domestic and foreign cotton prices continued to fall in October, and domestic and foreign cotton prices narrowed sharply.

In October, the average monthly price of domestic 3128B cotton was higher than that of the international cotton price Cotlook A (FE), and the average monthly tariff of 1% yuan was 3771.37 yuan / ton, narrowing 1249.49 yuan / ton from last month, narrowing sharply.

Viscose, polyester, yarn, grey cloth and other prices continued to decline.

Exports maintained double-digit growth and domestic demand growth remained weak.

Three quarterly bulletin: textile manufacturing: in the first three quarters of 2014 (excluding black peony [0.00% Funds Research Report), a total of 39 companies achieved total operating income of 67 billion 285 million yuan, an increase of 1.77% over the same period last year; net profit attributable to shareholders of the parent company was 4 billion 204 million yuan, down 12.34% compared to the same period last year; net profit after deducting non profits was 3 billion 368 million yuan, up 48.4% over the same period last year; earnings per share were 0.2 yuan, an increase of 11% over the same period.

In the first three quarters of 2014, the SW apparel home textile industry (excluding the main industry, non clothing of the new Yang Feng, YOUNGOR [-0.97% Fund Research Report), the red bean [0.00% Fund Research Report] opened

[0.49% Funds Research Report], the data not comparable to the Hai Lan home, a total of 31 companies) achieved a total revenue of 53 billion 957 million yuan, down 12.57% compared to the same period last year; net profit attributable to shareholders of the parent company was 3 billion 948 million yuan, down 17.01% from the same period last year; net profit after deducting non profits was 3 billion 222 million yuan, a decrease of 23.6% in the same ratio; the realization of 0.25 yuan per share, a decrease of 23% over the same period last year.

November investment strategy: textile manufacturing: maintain prudent recommendation ratings.

In October, domestic and foreign cotton prices continued to decline, cotton fell faster, increased, and the difference between inside and outside cotton prices narrowed sharply from last month.

After the new cotton market, cotton prices still have room to fall.

However, due to the peak season of replenishment, it is expected that the downward trend of cotton prices may be narrowed.

External demand remains weak, and domestic demand is still weak. Prices of yarn and grey fabrics will continue to fall.

There is no big surprise in the short-term industry fundamentals.

The industry's leading three quarterly results basically meet expectations.

Short term market is expected to continue to plate.

And restructuring the concept stocks.

In the long run, the domestic price is going to be marketization, and the price of domestic cotton is expected to gradually integrate with the cotton trade, which will benefit the long-term development of the cotton textile industry in the long run.

This round of industry adjustment, part of the weaker industrial SMEs to shut down, is conducive to the industry leading market concentration.

Fourth quarter can focus on Lu Tai, Rebecca [0.43% Fund Research Report] valuation switching opportunities.

Apparel home textile industry: maintain prudent recommendation rating.

Industry three quarterly report overall performance decline continues to expand in the market expectations.

Short term clothing home textile industry fundamentals have not improved significantly, but the industry has been adjusted for more than two years, the worst of the industry has passed, 2015 is expected to gradually improve, the performance decline is expected to gradually narrow, to maintain the industry's cautious recommendation rating.

Fourth quarter can be concerned about the 2015 fundamentals are expected to be good or merger and pformation expected stock valuation switching opportunities.

For example, Semir apparel [-1.87% Fund Research Report], Pathfinder [-5.22% fund research report, Mei Sheng Culture [-2.23% Fund Research Report], Luo Lai home textile [-0.77% Fund Research Report],

[-0.07% Fund Research Report], nine Mu Wang [0.08% Capital Research Report], Saturday [-0.12% Fund Research Report], AOKANG international [-0.06% Fund Research Report].