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Textile Industry: Through Cycle &Nbsp; Focus On Growth.

2011/12/13 9:33:00 18

Textile Industry Focuses On Growth Through Cycle

The rise of domestic demand and the predicament of sustainable growth of brand enterprises: according to the theory of industrial life cycle, it is a historical rule from growth to maturity, and then gradually decline or even withdraw.

Although most textile and garment enterprises in China are mainly outside demand, they do not form high-end autonomy in the international market.

brand

As well as channel control power, enterprises encounter the embarrassing situation that the manufacturing link is passively moved out and the high-end field is hard to break through in the short term.

Opportunity: the rise of China's demand will become the biggest opportunity for local enterprises to cross the traditional life cycle, and is expected to alleviate the problems facing them.

awkward

Situation.

China already has the largest population base in the world, and the rich and powerful people have greatly increased their spending power and willingness.

Domestic brand clothing enterprises will make full use of relatively relaxed environment to create and enhance the awareness of their own brands.

Reputation

High growth is sustainable.

Countermeasures should be taken to cope with the downward trend of inflation and economic growth in 2012.

Focus on growth challenges:

It is estimated that the fall of CPI in the first half of 12 years will be accompanied by a slowdown in economic growth.

1, inflation is falling and price rises are hard to sustain.

The fall of CPI in the first half of next year will obviously weaken the effect of raising prices, and the growth of the industry will be expected to increase.

2, economic downturn, consumption will be suppressed.

The fall of GDP will reduce people's consumer confidence and indirectly reduce their consumption power, and the release of quantity will be under pressure.

Strategy: a company with brand premium is expected to go through the cycle and continue to raise its price on the premise of volume increase.

Since the 08 financial crisis, the growth rate of men's clothing has been consistently higher than that of the industry. The 12 year spring and summer orders will synchronously increase the price while the order grows, and the relative advantage is obvious.

It is an important embodiment of the brand premium capability that the price can still be raised smoothly under the disadvantage.

Through the cycle, focusing on Growth -- optimistic about the men's clothing industry

The PEG of most brand clothing companies is between 0.5-0.8 and has a strong margin of safety.

Considering the high growth space brought by the rise of domestic demand to local brand enterprises and the macro environment of inflation decline and economic growth decline in the first half of 12 years, the recommended varieties are men's clothing and home textile sub sectors (the growth rate is above 30%, and 12 years PE is between 20-23X).

The promising companies are seven wolves, nine herd kings, Hinur, good news birds, Luo Lai home textiles, fuanna and Meng Jie home textiles.

Risk warning

A sharp downturn in the economy has slowed down consumption, and the cost of raw materials, labor and channels has risen more than expected.