The Medium-Term Strategy Of Huatai Securities In Textile And Garment Industry In -2019

Abstract:

Core view

In the second half of 2019, the spinning and weaving board is suggested to be configured from three main lines: 1. defense portfolio: the men's clothing industry still achieves a steady improvement in the market scale in the overall consumption slowdown. It highlights a good ability to resist risks. The industry concentration degree promotes the leading enterprises, and the target area suggests that we should pay attention to Hai Lan's home.

2. reverse combination: with the gradual improvement of downstream consumer demand, textile manufacturing is expected to usher in a reversal of performance.

The proposal suggests that we should pay attention to Baron East and Lu Tai.

3. elastic combination: the consumption desire and consumption tastes of middle class women began to increase. The growth of high-end women's clothing in recent years is higher than that of women's clothing.

We are optimistic about the platform company with strong brand operation ability. The target area suggests that we should pay attention to the songs, fashion and fashion of An Zheng.

Defense portfolio: Men's clothing market scale stable development, leading defensive highlights

The steady expansion of men's clothing market is still well behaving under the overall slowdown of consumption growth, which highlights a better ability to resist risks.

According to European consultancy data, 2014-2018 years, China's men's clothing industry CR20 from 22.6% to 27.6%, CR5 from 10.5% to 13.4% year by year, but compared with developed countries, there is still greater room for promotion.

We believe that in the next few years, the situation of the survival of the fittest in our men's wear market will become clearer, and the concentration will continue to improve, and the moat of the leading companies will become stronger and stronger.

Compared with women's wear, the SKU of men's clothing is less, which makes the scale advantage of the production side more obvious.

In terms of the target area, it is recommended to pay attention to Hai Lan's home (men's faucet, light assets operation to reduce the risk of inventory impairment, for a long time to maintain significantly higher than the industry average ROE level, dividend yield is high).

Reverse combination: Q1 textile manufacturing warmer, it is recommended to pay attention to costs, products moat business.

The layout of overseas domestic production capacity of some textile manufacturers has begun to take shape, which has already hedged the impact of global industrial pfer and Sino US trade friction to a certain extent, and has strengthened its own cost advantage.

In the long run, China's textile manufacturing enterprises rely on the world's largest consumer market, and have strong moat in terms of customer resources, scale advantages and technology research and development.

Overseas, the Japanese Dongli group can still maintain an important position in the high-end fabric market with its leading R & D capability after the pfer of Japanese textile industry.

We should pay attention to the Baron East and Lu Tai A.

Elastic combination: high end women's clothing is promising, platform oriented company with good brand operation ability.

The number of middle class in China has gradually expanded, especially the consumption desire and consumption quality of female middle class groups began to improve. In recent years, the growth of high-end women's clothing is higher than that of women's clothing.

The three major international luxury goods companies are platform based and multi brand platform companies. We believe that the middle and high-end women's clothing enterprises also follow the same logic: (1) because of the higher requirements of individuation, the single brand market of high-end and high-end women's clothing is limited, and it is easy to be influenced by the fashion trend.

Through the multi brand operation of collectivization, we can not only expand the scale of enterprises, but also reduce the operational risks caused by changes in demand.

(2) brand operation capability is the key factor for the development of platform companies.

We are optimistic about the development of platform based high-end women's clothing companies with strong operation ability. We should pay attention to the songs, fashion and safety fashion.

Risk warning: domestic consumption demand is declining, trade environment changes are over expected, and raw material prices fluctuate.