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High Cotton Price Drives Profit Differentiation Of Textile Enterprises

2010/12/18 8:50:00 66

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High Cotton Price Textile Enterprises

Imbalance between supply and demand

High cotton price

In 2010, the global imbalance between supply and demand is driving the price of cotton in the current round.

Rise

The most important reason.

The trend of cotton prices in 2011 is downward. We expect that cotton prices will be greatly supported at the current 25000 yuan / ton before May next year.

With the advent of new cotton market in Brazil in May, downstream demand will enter the off-season, and cotton prices will become a trend.

Fall

。

But we judged that the domestic textile and clothing sales in 2010 will maintain 25%-30% growth, slightly higher than this year's growth rate, while the export growth rate will slow down, but it will still maintain 10%-15% growth. Therefore, the downstream demand will maintain a steady growth.

The trend of cotton production decline in China is difficult to improve before the new cotton market in October 2011. Compared with the international cotton price, China's cotton prices should be stronger, and the cotton price will fall to a low probability of 14000 yuan / ton in the early stage. The cotton price center may be raised to 20000 yuan per ton.

The high cotton price has led to the profit differentiation of enterprises, and the textile and apparel retailing industry has the strongest ability to pfer costs: the high cotton price has brought the textile and garment industry into the era of high cost operation, and has promoted the differentiation of the profits of each sub industry.

We believe that the textile and garment retail industry is the most advanced consumer, with the highest cost pfer capability and the most profitable business. The subsidiary industry of garment accessories occupies a smaller proportion of total cost of textile and clothing, less impact on cost and stronger profitability.

Next year, downward trend of cotton prices, cotton textile, printing and dyeing, clothing manufacturing and other sub sectors income trend downward trend, inventory adjustment will affect the quality of asset operation, the company's profitability is facing huge challenges of raw material fluctuations, downside risks are greater, clothing manufacturing sub industry cost pfer ability is the weakest.

The textile and garment retail industry will be the highest performance in the next year. In 2011, in the context of high cost, we mainly recommend the textile and garment retail sub industry with the strongest cost pfer capability and risk tolerance capability.

The 2011 Annual Report will be the highest annual performance in the industry.

In the first half of this year, with the increase in demand and peak season, the retail sales and profits of the first half of the year increased rapidly. With the peak season of consumption, the terminal consumption slowed down in the 2 quarter, and asset turnover began to slow down.

To give the textile and garment retail industry "leading city -A" investment rating: the high cotton price has made the industry enter a high cost operation era in 2011. We compare the operation quality of each sub industry, and think that the downstream textile and garment retail cost has the strongest ability to pfer and resist risks. We give the textile and garment retail industry "leading city -A" investment rating, while the traditional textile and garment manufacturing industry has a relatively low inventory adjustment pressure due to the poor cost pfer capability. We maintain the textile and garment manufacturing sub industry "synchronous big city -A" investment rating.

Recommended portfolio: Luo Lai home textiles, fuanna, Rebecca and Saturday: in the selection and recommendation of investment targets, we follow two main lines: one is in the fine industry sectors of textile and clothing retail industry, we choose the sub sectors with fast growth and low cost pressure. We are optimistic about the three major sub industries of wig fashion, outdoor products and home textiles, and combine the valuation level in 2011. We recommend the home textiles, fuanna and Rebecca.