Textile And Garment Industry: Pay Attention To The Good Price Of Cotton And Welcome The New Outlet Of Consumption.

The depreciation of exchange rate and the rise of cotton prices improve the business environment of enterprises, and enhance their performance obviously.

Since the 15 year reform, RMB has depreciated by more than 7%, increasing export earnings and enhancing the competitiveness of export commodities.

By short-term cotton supply and demand reversal, downstream textile enterprises low inventory, profit improvement, stacking and dumping progress slow impact, domestic cotton prices rose rapidly.

Futures (continuous contracts) have risen by more than 30% since March.

Cotton demand in the next 16 years is expected to exceed that of last year, while the cotton planting area in the whole country dropped by 10.1% compared with the same period last year.

Downstream brand retail: focus on consumption, pursuit of price performance, children's clothing explosion

There has been no significant improvement in the industry in the past 16 years.

In the context of economic slowdown, consumers are more concerned about quality, and cost-effective brands can seize the market.

UNIQLO and GAP both had a rapid rise in the economic downturn, and now the GU and Primark, which are positioned at a lower price, are very bright.

The brand trend of children's wear is obvious. The second child policy and children's consumption promotion drive the industry to grow at a high speed. The market scale is expected to reach 150 billion in 17 years.

Supply chain management should happen at times.

The overall demand for textile and garment industry is relatively weak, oversupply, low market concentration, and the mismatch between supply and demand is very obvious.

The traditional mode of industrial chain is too long, and the consumption of intermediate links is serious.

Supply chain management has become the key for the industry to get out of the predicament.

On the one hand, supply chain management reduces intermediate links and improves efficiency.

On the other hand, the flexible supply chain can meet the needs of consumers in high frequency, small batch and personalized demand.

IP derivatives become a new outlet for consumption

The data show that the core industries of 2011-2015 years of Pan entertainment are in a long-term upward trend. The total output value has increased from 188 billion 800 million yuan to 422 billion 900 million yuan, and the compound growth rate has reached 22.34%. The gross output value of the entertainment industry in 2015 has reached 42 billion according to the scale of the proportion of the peripheral entertainment products accounted for 10% of the entertainment industry.

IP derivatives can bring huge terminal traffic, strong liquidity, and are on the new consumption outlet.

investment strategy

Textile manufacturing sector: a leading enterprise that recommends undervalued performance and steady growth, especially those that benefit from the depreciation of the exchange rate, such as Huafu color spinning, Xinye textile, Luen Fat share, Baron East, Lutai A, and urge shares.

Brand retail sector: recommendation 1) underestimate the value, PEG<1's white horse Semir clothing and Hai Lan's home; 2) pformation of supply chain management, high performance growth in search of special; 3) standing at the consumer outlet, cutting into the star peripheral market.

Risk warning

Economic downturn, terminal consumption continued to slump; new business model business risk; cotton prices fell; abnormal fluctuations in the RMB exchange rate.