Textile And Garment Industry: How To See The Investment Opportunities Of 2019

Investment points, brand clothing, stock prices fluctuate sharply in 2019, and the space is limited.

There is no need for investors to worry that brand clothing will be replayed in 2019 (a sharp adjustment to the stock market in the wholesale mode). At present, the brand clothing enterprises that can precipitate and develop very well will no longer be a simple wholesale wholesale development with brand expansion and channel expansion. "2012"

In the past 2012-2017 years, these enterprises have made great efforts in product development, supply chain management, terminal retail management and so on. The assessment has also been gradually pformed into terminal retail orientation. In essence, the idea of "terminal integration" and "company interest integration community" have been formed, and the high volatility brought by pressure has gradually become the past.

On this basis, we should pay attention to the trend of gradual increase of market share after the reform of the company, such as the proportion of Anta in sports apparel and the data of Barbara in the children's wear industry.

On the contrary, the brand clothing enterprises with clear positioning and straight battalion occupy a higher level in the industry, which generally went to stock in 2012, such as bebul Finn, fuanna (002327) and Jiangnan cloth dress.

At the same time, most of the brand clothing enterprises are valued at 18 years and 10-15 times PE level. Because of light assets operation and good cash flow, cash on the books is possible for high dividends.

All of the above decide that the quality brand clothing enterprises have a limited space to adjust downward, and the main economic environment that restricts the plate upward performance. Since the end of June this year, the Q1 growth rate is even more difficult (the number of high base numbers, the relatively early spring festival, year-end income and employment status) in 2019.

In the outlook for 2019, we think it is necessary to talk about Bosideng alone. Since the recommendation in June 2018 (based on the recognition of entrepreneurship, as well as the company's perception in product pformation, brand marketing input and terminal channel system pformation), we have been thrilling and honored to witness the process of a traditional brand's counterattack.

Fortunately, even with the poor retail terminal and the delayed winter season, the brand and product pformation of Bosideng are smoothly reflected in the terminal retail data, which is a good start.

From past experience, a company's pformation will have at least 2-3 years of bonus period. We believe that Bosideng in 2019 is still worth investors' expectation.

High quality manufacturing in 2019 is the main logic of global industrial layout.

What investors did not expect is that in 2018, investors with high concern and low quality made some positive gains, such as Lu Tai, Bailong and so on. We believe that besides the stability of performance, they are closely related to the very low market expectations at the beginning of the year.

We always believe that the leading Chinese manufacturing industry has formed a global competitive advantage. The Shenzhou International Textile and garment industry is like the Foxconn in the electronics industry, the moat is very deep (product development, lean management), and the stability is also very strong.

In the era of capacity globalization, the growth of market share of such companies is still in the process of centralization, which is still worth investors' expectation.

Looking forward to the 2019, the main factors affecting the short-term performance of quality manufacturing are export environment, RMB exchange rate and raw material price.

There is a downward pressure on the export environment, but the estimated exchange rate and raw material prices have relatively small impact. Therefore, those quality manufacturing enterprises that have experienced twenty or thirty years of development are expected to achieve stable development of their performance.

The logic that affects quality manufacturing investment is the layout of the global capacity. We have been recommending Tianhong textile to investors. Our company's views are firmer after the acquisition and integration of the textile company.

The new model will still maintain relatively rapid growth in 2019.

The new mode is part of the new retail business. It is part of the ecosystem of Ali (Antarctica), millet (open run), and many Spa (Antarctica) business providers.

The new pattern has always been changing rapidly, and the concepts of organizational structure and development are changing rapidly. This is also the reason why investors will worry about the stability of such companies. Once the stability is verified, the valuation given is also very high (such as the shares of open run).

"New" represents hope and future. It is precisely because of the development of these new models that we have seen that traditional retail and wholesale have been separated and replaced in the past six or seven years.

In the current time when market expectations and confidence are very low, we think that the probability of excess return of such companies in 2019 is obviously larger.

Risk warning: macroeconomic growth slows down terminal consumption, and raw material prices fluctuate.