Textile And Clothing: Companies With High Export Proportion

At present, the average value of textile and apparel industry is about 22 times, basically in a reasonable range.

However, due to the expansion of the strong and strong effect of leading enterprises, the performance growth and certainty will be higher, and the valuation will be raised.

In the first quarter of 2019, the overall performance of textile and garment enterprises was still under pressure. High quality enterprises still ran out. The boom of high-end clothing, children's wear and sports shoes and clothing in the sub industry was relatively high.

It is worth mentioning that the low RMB is conducive to the export of textile and garment industry in the short run.

Textile and garment export enterprises benefit from three aspects: hand orders, US dollar assets and future orders return.

Some people pointed out that many of the A share listed companies in textile and garment sectors accounted for more than 50% of business revenue.

The US dollar is the main settlement currency of most export enterprises. The United States is still the largest export destination for China's textiles. Therefore, the depreciation of the RMB against the US dollar has made the domestic export oriented enterprises benefit from various aspects.

Industry insiders say that from the perspective of RMB exchange rate, textile and garment companies with a larger share of overseas business will benefit more.

Under ideal conditions, the profit elasticity brought by the low RMB to textile and garment enterprises is determined by the proportion of exports and the net sales rate of enterprises.

It is estimated that the sales profit margin of the textile and garment industry will increase by 2% to 6% when the RMB falls by 1%.

If the RMB exchange rate continues to fall, it will bring short-term improvement in elasticity to our textile and garment export enterprises. For this purpose, we should focus on measuring the benefit elasticity of earnings, and we should pay attention to the high proportion of overseas income, the larger improvement rate, and the leading underestimation of the undervalued value. For example, the shares of A (market 002083, diagnostic shares), the joint stock market (market 002394, the diagnosis shares), the Lutai A (market 000726, the diagnosis shares), the cross border pass (market 002640, the diagnosis stock), and the Jonsson group (market 603558, diagnostic stocks).

Potential stock selection

Joint venture shares (002394) grew rapidly

As the leader of the yarn dyed fabric industry, the company has a clear leading edge. In 2018, the company's performance showed a recovery growth, and the first quarter of 2019 showed a rapid growth.

Everbright Securities (quotes 601788, shares) pointed out that the company's capacity is mainly in the domestic and Kampuchea, the main products are full of color and fabric production capacity, is expected to grow steadily, printing and dyeing cloth, printed cloth, clothing and other productive capacity, there is still room for development and improvement, and bring growth.

In terms of capacity increment, the company plans to build new capacity in Ethiopia and Xinjiang. In November 2016, the company signed a cooperation intention agreement with China earth group, and built dyed fabrics, yarn dyed fabrics, garments and spinning factories in Ethiopia. In addition, the company announced in May 2018 that it was planning to build an annual output of 28 million meters of home textile grey cloth and supporting yarn production in Xinjiang.

The company has prominent leading position and low valuation.

Lu Tai A (000726) is highly competitive.

The company is the leader of China's yarn dyed industry chain, and its products have strong competitiveness.

GF Securities (quotes 000776, diagnostic stocks) pointed out that the garments production capacity of the company in China, Vietnam, Kampuchea and Burma was 1500, 300, 600 and 3 million respectively, while the 3500-4000 phase of the two phase project in Vietnam and the production of 3 million garments were under construction, and is expected to be put into operation in 2019-2020 years.

The expansion of production base in Southeast Asia will effectively utilize the advantages of local raw materials, labor, income tax and customer import tariffs to promote the company's future growth.

The company's revenue from export business accounts for more than 60%. Under the uncertainty of Sino US trade frictions, the layout of Southeast Asian capacity enables products to be exported directly from Southeast Asia and reduce the risks caused by trade friction.

Kin Sheng group (603558) order growth driven growth

The company is the largest cotton stocking manufacturer in China. It mainly produces all kinds of high-end high-end cotton socks, layout dyeing, accessories production, weaving and so on. It adopts the production mode of ODM and OEM, and has become a long-term supplier of famous Brand Company such as PUMA, UNIQLO, UA, Decathlon, HM and so on. The export proportion is over 80%.

Guosheng Securities pointed out that the company's Vietnam capacity release, orders growth driven growth.

Vietnam is more attractive in terms of tax policy and production cost than Vietnam, and Vietnam's capacity is released to attract more customers and orders. It is expected that in 2019, the South cotton socks will achieve 150 million double production capacity, an increase of 36%.

In addition, the company entered the seamless underwear market and made remarkable achievements.

With its leading technology, quality customers and capacity release, Qiao Ting Ting is complementary to the company's main business, and its growth rate can be expected.

Kang Longda (quotes 603665, diagnosis shares) has huge market opening space.

The company focuses on the independent research of the production technology and technology of new materials and products of polymer fiber. From the input point of view, the R & D rate of the company in 2017 is 3.46%, higher than that of the domestic average and international leader.

Materials research and development, the introduction of new products ultra high molecular polyethylene fiber, breaking the Holland international new material giant Royal DSM technology monopoly, the future of new materials application space is huge.

CITIC construction investment (market 601066, diagnostic stocks) Securities pointed out that the company is the leader of domestic labor protection gloves, and the future is expected to be based on the US company GGS and Shanghai Kanthman.

Referring to the industry leader ansee's experience, we think that the extension of the industry chain to the vertical chain and the extension of the horizontal category are huge. With the advantage of the platform, we hope to achieve the double drive development of both internal and external industries.