CITIC Securities: Growth Of Domestic Textile And Garment Retail Sales In 2010

In the short term, the manufacturing sector will face the risk of rising costs, European crisis and exchange rate appreciation in the fourth quarter.

While the retail sector of the retail sector suffered unfavorable factors in 2010, data showed that growth remained strong.

Since 2004, China's textile and clothing consumption has entered a stage of high growth, but at present, China's textile and clothing market is only about 1/2 of the export market. Therefore, in the long run, as the basic consumer goods of the residents, the growth of consumption in the future will benefit from sustained rising income.

In view of this, we maintain the brand retail sector's "stronger than big city" rating.

The adverse factors faced by the domestic clothing retail market in 2010 mainly include two aspects: abnormal weather and rising cost.

Despite these adverse effects, the steady growth trend of retail trade has not changed.

In 2010 1-5, the retail sales of textile and clothing consumer goods increased by 23.1% over the same period last year, an increase of 4.28% over the 2009 level.

Among them, the retail sales of clothing products increased by 24.4% over the same period in 1-4 months, which is better than the average level of retail sales growth.

Meanwhile, data from key large department stores showed that retail sales of key large department stores increased by 25.42% year-on-year in the first quarter of 2010, of which sales increased by 5.25% over the same period last year.

We estimate that domestic textile and garment retail sales will increase by more than 20% in 2010.

The opening of domestic consumption and the outbreak of overseas economic crisis accelerated the pformation from "processing" to "brand retail".

The key links of the industry chain - design, production, brand, channel and so on are in the process of pformation.

Although the home textile sub industry is affected by the adjustment of real estate, updating demand and wedding needs will cushion its growth rate.

If the residential sales area is reduced by 20%, the growth rate will still reach 10%.

At present, the retail sector of the brand is PE 32 times in 2010, and the continuous growth of performance will be the premise of its valuation improvement. It is recommended to grasp the two categories of "clear performance growth" and "business turning point". The former focuses on seven wolves.