Textile And Garment Industry: Short Term Retail Terminal Weak Plate Still Needs To Be Consolidated.

Overseas news: (1) XTEP's same store sales continued double-digit growth.

(2) Bosideng brand down clothing sales increased by more than 30% in the first nine months.

(3) PaulSmith's annual revenue growth has increased rapidly, and is expected to be "more positive" this year.

A share industry and company important information: (1) Chao Hongji: the company signed the strategic cooperation framework agreement with the company of Andrew and Bob.

(2) blonde Rabbi: the company signed a partnership with RightViewLimited and O8ISRAELLTD to develop Holland's "Umee" feed series and Israel's "O8" maternal and child brand care product series.

(3) cross border communication: the actual controller of the company, Ms. Fan Meihua, has accumulated 15 million 590 thousand shares of the company's shares through block trading, accounting for 1% of the total share capital of the company.

(4) Fu Tian shares: the shareholding reduction plan of Mr. Sun Rigui, a shareholder holding more than 5% of the company's shares, has been implemented and has accumulated 2.2% shares.

(5) Wenger: the 2018 annual performance Bulletin: the company expects to achieve a 20.21% and 44.28% increase in operating income and net profit respectively.

(6) Tian Chong fashion: the company intends to make a total public offering of not more than RMB 600 million yuan convertible bonds, for intelligent manufacturing base construction projects, repurchase shares and supplementary liquidity.

(7) the investment and financing situation of 12/29~01/04 consumption industry: A. shoes trading platform, poison App has got a new round of investment, B. chain gym, light pig pen has won 51 million yuan A+ round investment.

This week, we recommend plate combination: Semir costumes, Hai Lan's home, Lao Fengxiang and Song Si Si.

Last week, the combination showed: Semir clothing -4%, Hai Lan home 1%, Lao Fengxiang -3%, and Song Li Si 0%.

Investment proposals and investment targets

From the recent 18 years of the fourth quarter of the textile and garment business situation: (1) by the retail environment downturn and weather and other factors, most brand clothing sales are not ideal (10-11 winter sales are weaker, after December cooling has improved), 18 years annual report to 19 years (especially 19 quarterly) brand clothing plate will continue to digest the impact of the slowdown in growth.

(2) the slowdown in downstream demand has gradually affected upstream orders, and the textile industry boom in the fourth quarter has been weakening.

From the valuation point of view, after three years of continuous adjustment of the industry, the original valuation pressure has been substantially released. We expect that in the second half of 19, with the digestion of the 18 year high performance base, the 19 year profit forecast and the adjustment of the business strategy aiming at the current market environment, we will superimpose the stable ROE and cash dividends expectations. Some leading companies are expected to take the lead in attracting the funds of the medium and long term funds.

The slowdown in terminal demand in the 19 years will accelerate the reshuffle of the industry, and help the leading company with a solid foundation and more obvious scale advantages further widen its gap with its competitors.

At the recent stage, we suggested that we should pay attention to the white horse leading with higher active and expected cash dividends of repurchase and increase, such as Hai Lan's home, Semir clothing, Be Meleven, Song Li Si and di Su fashion. Under the background of economic slowdown, we suggest that we should pay more attention to some of the daily consumer company that are more popular and sink deeper.

Risk warning

The risk of industry investment mainly comes from short-term pressure of domestic retail terminal, cotton price and RMB exchange rate fluctuation.