Textile Business Turning Point Is Expected To Be Reflected In The Two Quarter.

< p > market for < a target= "_blank" href= "//www.sjfzxm.com/" > textile < /a > manufacturing industry has always been considered to be a sunset industry, with low concern, but the industry data in recent two months are illustrating that the industry turning point is asymptotically.

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< p > first, the situation of export warming is continuing, and the total export volume of textile clothing in 1~4 months has increased by 16.5%. It is expected that along with the improvement of the peripheral economy, the export stabilization and recovery will continue. Secondly, the cotton planting area will decrease and the cotton price difference between inside and outside will be narrowed.

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< p > Third, textile enterprises generally exceeded expectations in a quarterly report. The income of our 3 key companies increased by 12.2% and net profit increased by 54.3%. We expect that this year's performance of textile leading enterprises is expected to explode on the basis of low base in 2012.

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< p > in addition, taking Hong Kong stocks as an example, textile manufacturing also has "spring", and some enterprises have a high share price, and the share price has risen 10 times since the listing so as to become "big bull stocks", such as Shenzhou International, Tianhong textile, etc.

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< p > we think that the leading competitive advantages of the traditional textile manufacturing industry are obvious: first, the leading enterprises are benefiting from increasing concentration: stable and large-scale production capacity, enabling them to have famous brands such as UNIQLO, ZARA, Lining and other well-known a target= "_blank" href= "http:// www.sjfzxm.com/" > clothing "/a" brand customers, effectively protecting the order quantity and quality.

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< p > secondly, vertically integrated industrial chain enhances risk and quality control capability: Shenzhou complete guarantee, delivery efficiency and stable profitability; Lu Tai owns a complete industrial chain from cotton planting to spinning and weaving and garment making, with stable gross profit margin.

Finally, overseas manufacturing makes a lot of dividends: preferential tax, low labor force and free importation of international cotton are important reasons for Shenzhou and Tianhong to build factories in Kampuchea and Vietnam.

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< p > textile enterprises have dual attributes of growth + cycle. In the long run, manufacturing enterprises have continuous growth.

The concentration of textile manufacturing industry is constantly improving. With the recovery process of the industry, the order of high-quality enterprises is in short supply. The short-term performance of enterprises will be affected by the fluctuation of raw materials, but it can be digested through product price in the long run.

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< p > at present, the situation of enterprise orders has been continuously improved, and the turning point of operation is expected to be reflected in the two quarter. It is estimated that the leading valuation repair market will continue.

High performance resilience coupled with a rise in valuations, A shares are expected to achieve "Davies double click".

At present, the PB of Hong Kong stock enterprises is generally around 3.5 times, and the A share PB is about 1.5 times. There is still much room for repair. It is estimated that the leading share price of the industry will rise by 30%.

On the choice of investment targets, we should focus on investment opportunities of three leading industries such as Lu Tai A, Huafu color spinning and Baron East.

Shenyang Wanguo Securities Dalian sales department.

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