Investment Strategy For Textile And Garment Industry In 2020: Continue To Focus On High Quality Track And Undervalued Leader

Children's clothing industry has a high degree of prosperity. Compared to men's wear and women's wear, children's wear and sportswear are one of the relatively good tracks at present. According to Ou Rui's data, the market size of men's wear, women's wear and children's clothing in China in 2018 was 572 billion 600 million yuan, 999 billion 100 million yuan and 20191 billion yuan, up 6%, 8% and 16% compared with the same period last year. According to the forecast of Ou Rui, the growth rate of men's wear and women's wear industry will be reduced to about 4% in the next five years, and the children's clothing industry will still maintain more than 10% industry growth.

Pay attention to sports and leisure sub industries that meet the needs of consumer upgrading and healthy life. With the growth of China's middle class and the pursuit of health, beauty and fashion, consumption escalation is irresistible. Yoga clothing and other sports and leisure subdivision categories show high degree of vitality. For example, Canadian brand lululemon is enjoying the growth bonus of the yoga clothing industry, so that it can become the leading garment enterprise with a market value of nearly 23 billion 500 million dollars.

Cotton price determination needs to keep pace with demand. At present, the demand side has a great impact on cotton prices. Influenced by the domestic economic situation, the demand for textile products and clothing shoes and shoes at home and abroad is cold, which leads to a decline in demand for cotton yarn and grey cloth in middle end products, high inventory, raw material cotton's industrial and commercial inventories increased year by year, and cotton prices are hard to rise sharply.

The optional consumption of spinning and clothing continues to be low, and the growth gap of the selected consumer goods is widening. The retail sales of clothing, shoes, hat and knitted goods above the quota reached a high growth point at the beginning of 2007, and so far it has been on a downward track (excluding the 2008 global economic crisis). Monthly, the monthly growth rate in 2019 basically reached the lowest value in the same period of history. The growth gap between optional consumption and required consumption appears and shows a trend of widening gap.

The textile and garment sector is at historic low valuation. From 2000 to now, the historical price earnings ratio of the entire textile and garment sector has been elongated. It can be clearly seen that the price earnings ratio of the entire textile and garment industry is in a relatively low historical position, and the long-term value of distribution is showing. In the downturn of the industry, the listed companies are divided in different sectors and different companies. It is recommended to optimize the growth of leading companies and sub sectors, and pay attention to Hai Lan's home, Semir clothing, di Su fashion and BIE lefen.

Risk warning: the macro-economy continues to descend, affecting terminal consumption; cotton prices fluctuate greatly, affecting the cost control of the company; the competition in specific industries is aggravated; and the companies do not operate as expected.