Textile And Clothing Industry: Brand Clothing Continues To Decline

Last week's market review. Last week, the textile and clothing sector rose by - 0.48% (of which, clothing and home textile rose by - 1.65%; spin Manufacturing rose 1.04%), CSI 300 rose 1.09%, and the Shanghai Composite Index rose 0.84%. The overall performance is in line with our judgment since December, and the valuation center of the textile and clothing sector continues to move downward. Among them, the decline of brand clothing is large, and the overall performance is not as good as the overall A share. In terms of individual stocks, last week's low stock price rose higher; Youngor (7.37%), Lutai A (2.68%) and Weixing (3.45%), which have been recommended in our weekly reports since December, have performed well; Most brand clothing, especially Home textiles Average performance, such as Mengjie - 5.65%, Luolai Home Textile - 5.34%, Fuanna - 4.05%.

Key industry data. On the 10th, the customs express data showed that the export growth rate declined month by month. In December, the textile export was US $8.302 billion, up 12.6% year on year, and the clothing and accessories export was US $13.443 billion, up 7.2% year on year. China Business Information Network announced 50 key large-scale enterprises retail Enterprise data: The increase in discount promotions led to a 21.4% increase in clothing retail sales in December, 3.8% higher than the same period last year, and also higher than that in October and November.

Follow up review of key companies last week. Beijing, as a strong region of Lucie, has a stable growth of mature old stores; Among them, Zhongyou Rhine increased by about 16%, Landside by about 7% and MOJO by about 23% year on year in 2011; And the company's target growth rate for 2012 is more than 15%. The data of Baoxiniao Wenzhou base shows that the growth rate of main brands in the same store is obvious, and S ANGELO still needs to be improved; For contingent liabilities, which are mainly determined according to the signed return ratio, it is normally 30%; The increase in accounts receivable is mainly due to the rapid development of the company, support for the Little Giant Plan of franchisees, and contingent liability provision. At the same time, we studied Weixing. In the second half of 2011, when the overall macro export environment worsened month by month, we judged that Weixing could hardly perform independently. In addition to the traditional diamond business, due to the poor sales of casual wear in the second half of 2011, the metal buckle was also estimated to be relatively ordinary.

Investment suggestions and events worthy of attention next week: we believe that the industry performance is difficult to surpass the overall market: 1) Due to the early Spring Festival and the shortened effective sales period, the growth rate of clothing enterprises dominated by wholesale will not be too good in the first quarter; At the same time, the order meeting has basically finished, and the industry lacks other catalysts to drive the price rise in the short term; 2) The tracking of retail data of shopping malls and terminal retail data of key brand clothing enterprises in October and November shows that the terminal data is not very optimistic. In addition to climate factors, the consumption boom is estimated to have declined; 3) The market questioned the driving force of clothing price increase and medium - and long-term performance growth; 4) From the perspective of production and export enterprises, the export growth data is in a downward channel, and the high raw material prices in the same period last year just formed a high base of performance, which restricted the growth in Q4 2011 and Q1 2012.

This week we will mainly recommend listed companies - Youngor, Baoxiniao and Lutai A. The profit forecast of listed companies is still in the process of downward revision, and the focus of the market at the current time point is performance certainty; At the same time, because the high valuation is mainly based on high growth, and because of the uncertainty of growth, we pay more attention to undervalued enterprises in the short term. Based on this, select the above enterprises.