Exemption From Inspection And Quarantine Fees For Export Textiles And Other Commodities Will Continue.

From the Guangdong Zhanjiang entry exit inspection and Quarantine Bureau, according to the notice issued recently by the Ministry of Finance and the General Administration of quality supervision and quarantine, all entry and exit inspection and quarantine organs of all the ports for inspection and quarantine at all ports in the country in 2015.

Such goods, conveyance, containers and other statutory inspection and quarantine items shall be exempted from inspection and quarantine fees.

It is reported that since 2013, all over the world

In strict accordance with the requirements of the AQSIQ, the implementation of the inspection and quarantine fee waiver policy has been implemented for three consecutive years. The export commodity inspection and quarantine fee reduction policy has been implemented for a continuous period of 30 million years. The export and commodity inspection and quarantine fee of Guangdong Zhanjiang is only about $30 million.

We should vigorously support the expansion of exports and promote the development of local foreign trade and economic cooperation.

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The adjustment of the export tax rebate rate serves the needs of the adjustment of the export structure of the country. Taking textile and clothing as an example, in order to get rid of the financial crisis in 1998, the export rebate rate of textiles and clothing was raised from 6% to 11% in January 1998. In 2005, the peak of the export of textiles and clothing was the peak of China's export. In order to reduce the trade surplus, the export tax rebate rate of textiles dropped from 13% to 11% in 2006, and then reduced to 5% (viscose fiber) in 2007.

The export tax rebate rate rose from 16% in 2009 to 17%, mainly for the past 3 years, the textile and clothing exports continued to slump, the middle and low order accelerated to Southeast Asian countries and other unfavorable environment.

In the first 11 months of 2008, the export volume of China's textile and clothing increased by 8%, -10%, 24%, 21%, 2%, 11% and 5.6% year-on-year respectively, while the export volume of textiles and clothing in Vietnam over the same period increased by more than 40% since 2009. The continuous rise of domestic costs (labor, environmental protection, raw materials, etc.) has led to the weakening of the international competitiveness of China's textile industry.

The export tax rebate rate increased from 16% to 17% (some textiles and garments). From the perspective of the whole industry, it is favorable to enhance international competitiveness.

The benefit of enterprises in the industry is different due to the different product structure and business structure. The enterprises which are mainly yarn oriented, export oriented and relatively strong bargaining power will benefit significantly.

The improvement of export tax rebate rate is good for the competitiveness of China's textile industry in the world. However, due to the different structure of products (the increase of export tax rebate rate is mainly aimed at yarn) and the business structure (the ratio of products exported to different enterprises) is different, the degree of benefit is different.

The export oriented enterprises based on yarn will fully benefit logically. However, from the historical experience of the business level, the bargaining power of the textile enterprises as raw material suppliers is very limited. Under the condition that the downstream customers fully understand the cost structure and policy changes of the suppliers, the downstream customers will strive for more policy dividends, considering that the overall environment of the downstream customers' orders is relatively cautious (cotton prices are still downward and not yet stabilized), and the leading enterprises with relatively strong bargaining power are expected to benefit partly from the dividend policy that has increased the export tax rebate rate.

According to the above logic, it is expected that Huafu color spinning (top grade colored yarn is the main and direct export ratio is about 30%), and Baron East (the top color spinning yarn is the main and the direct export ratio is about 30%) will be directly benefited.

We are inclined to understand the improvement of the export tax rebate rate as a tool for the state to readjust its macroeconomic structure and export product structure. The core demand is still to stabilize foreign trade and ease the downward pressure on the economy.

In the three carriages of investment, foreign trade and consumption, the current investment lacks the conditions for large-scale stimulation (relatively tight finance, low enthusiasm for private investment), and continuous slump in mass consumption (the real estate market is sluggish, and it is difficult to play a significant role in the short term of emerging consumption). Boosting foreign trade is also conducive to boosting the domestic economy. From this perspective, the export tax rebate rate increase is expected to only boost part of the foreign trade. As a major export category, textile and clothing will certainly benefit.

Specific to the industry's investment logic, we maintain the textile industry "overweight rating", from the medium-term trend, cotton textile enterprises since 2010, the high cost dilemma, is expected to begin to reverse in 2015: since 2010, cotton textile enterprises are facing rising high cost dilemma, with the beginning of natural growth in human costs, environmental costs, the main raw material and cotton prices decline, cotton textile enterprises are expected to usher in the dilemma in 2015 to reverse, enhance international competitiveness.

And experienced early industry integration, small scale, relatively weak strength of enterprises to withdraw from market competition, industry concentration is expected to enhance overall, orders and other resources to the leading enterprises gathered, is expected to significantly improve the market share of leading textile enterprises.

The increase in the rate of export tax rebate, although it has little specific impact on the industry, will increase the net interest rate by 1%, but it will strengthen the logic from the point of view of the industry.

We recommend Huafu color spinning, Bailong East and Lu Tai A.

The main uncertainties are: the demand for overseas markets is not as good as expected, and the downward trend of cotton prices is too slow.