Textile And Garment Industry Looks Back To The Past And Looks Forward To The Future.

Outlook for textile and clothing in 2016: grasp three main lines

Since the beginning of this year, the textile and garment sector has gained top growth, and has won nearly 70 percentage points of the market. Why is the textile and garment sector ranking the top? Has the demand side been improved? What are the investment opportunities and ideas for next year? 2015.

Industry analyst Guo Haiyan told reporters recently that there are two main reasons for the rise of textile and garment sector this year. The first is related to the whole macro-economic background. The competition of brand resources is caused by the diversification of the channel expansion. Second, there are some structural changes in the whole brand clothing sector. Third, the main sector of the plate is down, but the cash flow is good, the market value is small, and the market is expected to have a pformation and reorganization of the plate.

In addition, Guo Haiyan said that the structural changes in the demand side of the textile and garment industry are very obvious, and the company that holds the structural changes will have good performance.

Guo Haiyan pointed out that next year

The plate can grasp three main lines, sports consumption brought about by demographic changes, and pformation of her economy and business.

However, Guo Haiyan cautions that investors also need to pay attention to the two major risks, the impact of cotton prices and the long-term impact of the TPP agreement.

Two major reasons for the rise of textile and garment sector

This year, the textile and garment sector ranked the top of the list. First of all, the whole macro-economic background. A major trend in China is the extensive expansion of channels. We have not only department stores but also shopping centers, and the supply of offline channels is in excess. At the same time, there are still a lot of highly competitive e-commerce platforms on the line.

Therefore, in this case, we deeply feel that brand is king in the process of channel expansion, that is, a brand may be contended by multiple channels under the online and offline channels, and its entire profit and performance will be relatively better.

Second, in our entire brand.

There are also some structural changes in the middle of the plate.

For example, from a global perspective, like sports Nike, Adidas, and many "fast fashion" brands are very popular, some leading brands in mainland China have achieved great success. Compared with traditional brands, their typical characteristics are: inventory turnover is very fast and the rate of markup is low.

The rate of increase is an important index for us, which is equivalent to the retail price divided by its production cost.

In this multiple, the traditional brands need to turn around for two hundred or three hundred days, and then the rate of increase is 5-8 times. But the leading brands who operate under the new mode may have 100 days' turnover, and the increase rate is only 2.5-3 times, for example, the production cost of 100 yuan is sold to consumers only 250-300 yuan.

From the perspective of global consumption trends, young people prefer brands with high cost performance, fast fashion and leisure sports.

After years of adjustment, if we talk about demand side, it is structural change.

In the past, China has gone through such a stage, especially in the 2004 and 2005, when the department store industry was particularly prosperous. At that time, if a suit price was 999 yuan, it was not easy to sell, and the front was 2 and 3, and immediately sold it. Even some of the companies in history sold suits of tens of thousands of yuan. At that time, the clothing consumption preference was "not expensive or not", because at that time there were no smart consumer goods such as smart phones, and so on.

But now, the real change in the demand side is that young people want to spend less money on more styles.

Young people will make purchase decisions in three aspects: first, the price, the price must be low, then the quality is better, the two aspects are cost-effective, and another factor is fashion.

It must be said that clothing consumption demand has increased substantially. This is not true, but its structural change is very obvious.

Companies that grasp structural changes have good performance.

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Grasp three main lines

Spin

Next year's investment opportunities and ideas are mainly manifested in the following aspects: we are concerned about some changes in population structure. There are three ideas for reference: 1) the demand for health, tourism, sports and fitness brought about by aging; 2) the economic needs brought by the increase of women's income; 3) the development of fans economy and brand electric business brought about by the increase of average consumption tendency after 90 years.

We are very optimistic about the sports industry. We think that sports consumer goods are rising again in China. In 2008, they were at the top of the sales volume, and the recovery is still hoping for a new high.

Her economy, including underwear, accessories, women's wear, jewelry, cosmetics, cosmetic surgery, children's consumption and so on, is more likely to achieve better market performance.

We also need to see opportunities for business pformation, on the one hand, slow turnover, high price conversion to fast turnaround and low price. On the other hand, there is also an opportunity to pform the electricity supplier mode.

We also see that some brands are directly online, there are no stores on the line, but they can achieve high sales revenue and have been recognized by consumers.

Two risks need attention

Investors should pay more attention to this aspect. The first one is cotton price.

Cotton prices directly affect the performance of upstream enterprises. At present, cotton prices have fallen below the 13 thousand expected bottom of the market. We think there are two reasons. First, the pformation of cotton from purchase and storage to direct subsidy. First, there is still 11 million tonnes of inventory pressure on state-owned cotton, so there is limited space even for anti ballistic missiles.

We have made systematic historical data analysis, and some market points of view believe that cotton prices fall well, and the gross profit margin of cotton spinning enterprises is improved. However, most cotton spinning enterprises have low bargaining power. Once the price of cotton falls, the order price will drop correspondingly. At the same time, the cotton flower inventory that has been stocked for 3 months in advance will also damage the gross profit margin.

Therefore, we regard this industry as a typical "Pro cyclical" industry, that is, cotton prices rise, profits are good, cotton prices fall and profits are poor.

Another is the long-term impact of the TPP agreement on China's textile and clothing exports.

The cost of labor, water and electricity in China is higher than that in Southeast Asia, such as Vietnam and Kampuchea.

In the medium to long term, the tariff cost between TPP countries will also be greatly reduced, and the long-term goal is zero tariff.

At present, due to the lack of skilled labor and supporting facilities, Southeast Asian countries are still mainly engaged in simple garment processing, such as printing and dyeing, high-end dyed fabrics and so on. However, the overseas pfer of textile enterprises' capacity and the replacement of Southeast Asia are the major trends.