Holding The "Leading White Horse", The Textile And Clothing Industry Waits For The Recovery Of Prosperity

One week's main review: 1. Industry tracking: ① In June, the retail sales of 100 key retail enterprises increased by 15.8% year on year, the highest monthly growth rate since the beginning of the year. In the first half of the year, the retail sales of 100 key retail enterprises increased by 11.02% on a year-on-year basis, of which the retail sales of clothing products increased by 9.82% on a year-on-year basis, a sharp drop compared with the same period last year. However, from the perspective of monthly growth, the retail market in China showed a slow recovery trend in the second quarter. ② Last week, we released the Investment Strategy for the Textile and Garment Industry in the Second Half of 2012: It is expected that the operating conditions of textile manufacturing enterprises in the second half of 2012 are still not optimistic, and the recovery of retail terminal sales is expected to drive the improvement of clothing retail enterprises. In the context of the economic recovery, investors are advised to be alert to "investment traps", arrange "leading white horses", and pay attention to "flexible varieties". ③ Last week, we issued the report "The seventh series of in-depth research on online shopping: clothing e-commerce home textiles, shoes, children's clothing, outdoor articles", which combed the online shopping market of various sub industries and concluded that traditional offline enterprises have the first mover advantage in operating home textiles (high degree of standardization), outdoor products (strong functional requirements), shoes (focusing on brand awareness); The future development space of children's clothing is huge. At present, Taobao brand is more popular on the Internet.

2. Company tracking: ① Seven Wolf Franchisee tracking: In the first half of the year, affected by weak consumption, terminal sales in Fujian Province declined to a certain extent year on year, with a decline of about 10%. The August 2013 Spring Summer Order Conference is about to be held, and it is expected that the company's guiding order volume will grow at 20%. ② Follow up by Baoxiniao franchisees: the terminal sales in Jiaxing in June were basically the same as last year, and the inventory was slightly accumulated but still benign. ③ Shinur Company tracked that more than 60 stores were newly added in the first half of the year, and the expense rate slightly increased during the period when there were many stores opened. It is expected that the growth rate of net profit in the mid report will be less than 10%, and the performance in the third quarter is expected to gradually improve.

Last week, the trend of textile and clothing sector was stronger than the market. Textile last week clothing The index fell 0.20% and rose 1.76% relative to the Shenwan A index. Among them, the clothing and home textile index fell 0.11%, 1.86% higher than the Shenwan A index; The textile manufacturing index fell 0.33%, 1.64% higher than the Shenwan A index.

Basic industry data: ① In June, the retail sales of 100 key retail enterprises increased by 15.8% year on year. From January to June, the retail sales of 100 enterprises increased by 11.02% year on year, including 15.81% in June, 21.91% in June, 17.72% in June, 13.56% in June, and 13.43% in June. ② From January to June, the retail sales of clothing products of 100 key enterprises increased by 9.82%. From January to June, the retail volume of clothing commodities increased by 0.99%, which was higher than that of the first quarter. ③ Last week, cotton and chemical fiber prices rose mainly: domestic 328 spot goods rose slightly by 0.2% last week and closed at 18262 yuan/ton, while Zheng Mian's main contract fell slightly to 19460 yuan/ton. Polyester staple fiber rose 2.3% to 10100 yuan/ton, viscose staple fiber rose 0.4% to 14800 yuan/ton, and nylon chip flat to 20400 yuan/ton.

Our view: hold the "leading white horse", pay attention to "flexible varieties", and wait for the boom to pick up. Last week, we released the textile and clothing investment strategy for the second half of 2012. It is expected that the retail terminal will gradually recover in the second half of 2012. We are optimistic about the men's clothing white horse stocks with stable operations. It is expected that the leading enterprises will report rapid growth in the mid report, and the performance in the second half of 2012 will be strong. Judging from the recent market performance, the textile and clothing sector frequently reported "landmines". Last week, under the pessimistic sentiment that the growth rate of men's clothing orders would slow down, the "leading white horses" of men's clothing all experienced a certain degree of correction, providing investors with a better time window for bargain hunting.

At the same time, the de stocking of the home textile industry is progressing smoothly, and it is expected to reach the bottom in the second half of the year. It is expected that the performance of the third quarter or annual report will be substantially improved. Continue to recommend the stable men's clothing leader Seven Wolves, Nine Muwang, and Baoxiniao; It is suggested to pay attention to the elastic variety Luolai Home Textile. At present, Luolai has a low valuation and a certain margin of safety; It can hold potential growth stocks with multi brand layout for a long time: Shanghai Jiahua and Landsee.