Cotton Price Rises In 2016 To Promote Cotton Business Elasticity

Sub plate differentiation is bigger, brand clothing performance is not as good as textile manufacturing.

In the first half of the year, the income and net profit of textile and garment industry increased by 8.73%/-0.82% respectively, while the growth rate of brand clothing revenue (9.10%) was slightly higher than that of textile manufacturing (8.20%), but the brand clothing showed negative growth in net profit (-1.94%) while textile manufacturing was 3.38%.

According to the sub sector: income, the growth rate of sports and leisure income is the fastest (27.82%), which is mainly driven by the sharp increase in search for special income, and the lowest growth rate of women's clothing (-11.85%), mainly due to industry pressure, while the pformation of new business in the sector has not yet made contributions to the table; net profit, the growth rate of sports and leisure is the highest (29.78%).

Home textiles / women's wear / outdoors showed a negative growth (-6.28%/-10.72%/-19.27%/-27.18%), and the division between the plates was larger.

The data are basically consistent, but the brand clothing discount promotion pressure is big, the overlay cost end influence, the profit side performance is not good.

In the two quarter, the income and net profit of the textile and garment industry were +10.04%/-20.97% respectively, and the overall performance was not as good as the first quarter. The growth of brand clothing income was slightly higher than that of textile manufacturing (9.99%), but the pressure of Q2 discount sales was greater, the impact of superimposed cost side, the brand clothing net profit and run down sharply (-31.80%), while the textile manufacturing sector increased by 12.35%.

According to the sub sector: income, sports and leisure income grew fastest (35.81%), women's wear / shoes and hat revenue grew the lowest (-10.58%/-11.14%); net profit, sports and leisure growth was the highest (37.34%), men's / outdoor performance was poor (-40.83%/-42.83%).

Investment strategy: brand industry: in view of the current basic situation of the industry, we believe that although the retail sales figures in recent two months appear to be improving in the early July (as a result of lower base), considering that the actual demand of the terminal has not yet shown a clear trend of recovery, it is estimated that the fundamentals of the Q3 sector will still be at the bottom.

Taking into account the current market is in a weak balance of shocks, to maintain the early low allocation point of view, it is recommended that the brand sector continue to hold the basic quality stocks with offensive and defensive capabilities, corresponding to the stock of robust white horse Semir, high growth cross border links, and no performance pformation theme small market value game varieties before the market rebound trend is recommended to prudently observe.

Textile manufacturing: following the announcement by the government of July 28th that the storage time will be extended to the end of September, it is estimated that by the end of September, cotton business inventories will reach a high level of 07 years, and the ratio of warehouse to sale is relatively high.

The slide caused plate price rises temporarily to a paragraph, but taking into account the large amount of low cotton reserves in Huafu and Xinye at the beginning of the year, and benefiting from the price increase in the first half of this year, this year's annual performance elasticity is strong, and it can continue to hold.