Overseas Demand Continues Weak Recovery, Textile Industry Will Improve Next Year.

The short-term fundamentals are flat, and the industry is still in a period of adjustment.

This year, the retail environment continues to be sluggish and clothing retail is flat.

At present, the overall macro consumption is still weak. In the light of the key Brand Company situation we have followed, we can see that the turning point of clothing demand is difficult to see next year. It is expected to remain at about 10% this year.

From the corporate profit statement and balance sheet, the overall performance of the industry is poor, and the turnover rate of inventory is still at a historically low level. At the same time, it is generally cautious next year and the stock is down.

Brand enterprises are in the two start-up period, and there are new opportunities for breakout of mode pformation.

The adjustment cycle of the current round of industry is so long (there is still no turning point in 2011-2014 years). In addition to the influence of the consumer environment, the adjustment of the traditional extensive mode is driven by the superposition of the consumption market changes.

The Internet is the biggest external factor of the consumer market pformation. The asymmetry of product information is broken, and the industry channel is ebb tide for the king era, and consumers become the core of the market.

We believe that there are two core changes in the current brand mode: first, Supply Chain Restructuring: reducing upstream supply costs and enhancing downstream terminal control.

The two is channel pformation: dealers will experience the survival of the fittest under the traditional line, and the O2O will be the mainstream mode in the future.

Judging from the three dimensions of brand discourse power, original channel mode and management inertia, the current outlandish Pathfinder and the type of Hai Lan House with direct battalion mode are also discussed.

Already has the leading edge.

Overseas demand continues to recover weakly, and next year's improvement will be limited.

Next year, industry exports are expected to grow by about 5-10%.

At present, the global cotton warehouse sales ratio is still high, and it is estimated that cotton prices will not change in the short term.

The decline in cotton prices directly brings about a decline in product prices. Taking into account the raw material inventory cycle, the short term has a negative impact on the gross profit margin of enterprises, while unstable raw material prices lead to short term orders, which directly affect the normal operation of enterprises.

In the medium to long term, the demographic dividend is disappearing, and the low cost advantage of the industry is weakening. The trend of industrial outward pfer is irreversible, and the overall pressure is greater.

Investment strategy: grasp the main line of mode pformation.

The apparel home textile sector is expected to be adjusted next year, and the overall business needs to be improved. Some of the leading companies are expected to emerge. In the whole year, we will promote the pformation benchmarking: Pathfinder, Hai Lan's home and Luo Lai home textiles. At the same time, we should also pay attention to the low score base, the performance inflection point: Lanzi stock, search special, AOKANG international.

Textile manufacturing sector is expected to maintain weak demand for foreign demand next year, long-term pressure.

We suggest that attention should be paid to the following aspects: first, the manufacturing technology with strong technological capability and high barrier capacity. Under the trend of brand supply chain reconfiguration, the value of such high-quality suppliers will be highlighted, such as Lu Tai A and Huafu color spinning. Two, the main business has a safety margin and a strong demand for diversified pformation, such as Jiaxin silk, YOUNGOR, Huafang shares and so on.

Key targets: Pathfinder (outdoor industry potential bull stock, the main industry is the benchmark of the industry, the value of green entry will be highlighted), the home of Hai Lan (Chinese version of UNIQLO), the leading industry of the direct selling mode, the precise and cost-effective positioning of a unique market, Jiaxin silk (the main industry is robust, real assets are substantial, the valuation of financial assets is increased, and the strategy of emerging industries is clear).