The "Boom" Of The Clothing Sector Is &Nbsp; &Nbsp; Fourth Quarter Performance Or Surprise.

"This year's winter clothes are expensive, both sweaters and down garments are much more expensive than they used to be."

Miss Wang, who loves shopping in department stores, sighs.

For this round, cotton prices soared.

As the cost goes up, brand clothing manufacturers, as the terminal of the industrial chain, seem to have no way to hide.

"Before, clothing manufacturers are hesitant about raising prices. After all, raising prices may affect the market.

Cotton prices are still rising since the three quarter. This time, manufacturers did not hesitate to raise prices, and some manufacturers even exceeded the price increase of cotton prices.

Li Xuerong, senior researcher of CIC consultant, said.

Then, with the arrival of the peak season, plus the opportunity to raise prices with cotton as an opportunity, will many of the end garment manufacturers gain growth in performance and thus bring investment opportunities?

Background: cotton prices have doubled this year.

"Cotton prices have doubled since the beginning of the year, which is not what they used to be."

Li Xuerong sighed.

As of November 12th, grade 328 cotton reported 31281 yuan / ton, up 110% from the beginning of the year.

It is understood that although high cotton prices have speculation factors, but the cotton gap still exists, it can be said that supply and demand gap is the main reason for cotton prices remain high.

From the current situation, this situation has not fundamentally changed, Haitong Securities and textile and garment industry core analyst Qu Zhihang made a "rising trend has not weakened" judgement on cotton prices.

Shenyang Wanguo statistical data show that in 2010~2011, domestic cotton supply is expected to be 9 million 570 thousand tons, of which 6 million 700 thousand tons of output and 2 million 870 thousand tons of inventory at the beginning of the year.

Over the same period, the total domestic cotton demand is estimated at 13 million 120 thousand tons, of which 10 million 800 thousand tons of spinning and other cotton are used.

Thus, in the next year or so, cotton will still have a shortfall of 3 million 550 thousand tons.

Xu Liang, an East Asian futures analyst, believes that there are some irrational factors for cotton prices to rise to this price, and then the price will be back.

"Nevertheless, cotton prices are hard to go back to the level they used to be."

Conduction: clothing price increase is unavoidable.

"The chain of cotton price rises basically follows the path from cotton to cotton yarn, to weaving, printing and dyeing, and finally to the terminal garment manufacturer.

Because of so many links, the price rise of clothing products is often lagging behind the price rise of cotton.

Li Xuerong said.

It is understood that in the process of pformation, the upstream link of cotton yarn and other industrial chains reflects a strong ability to pfer costs, while weaving and dyeing in the middle reaches are the weakest link in the industrial chain, and the ability to raise prices is weak. The profits of small businesses in the middle reaches are severely compressed.

In fact, as the cotton market is in good condition, the price of cotton yarn as a direct downstream of cotton has also risen sharply, even more than cotton.

Subsequently, the downstream weaving links of cotton yarn also began to rise, but due to industry reasons, this part of the price increase is far less than that of gauze.

"As for the finished products producers who are in the downstream of the industrial chain, we have to look at the specific circumstances. Some small foreign trade processing factories are not easy to raise prices because they are simply processed and have low competitiveness.

And the brand clothing manufacturers who have already been listed will have more room to raise prices.

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In fact, despite the soaring cotton prices in the first half of this year, the brand clothing manufacturers still dare not rush to raise prices.

But since the three quarter, these manufacturers have finally lost their spirits and have raised the prices of their products.

"Because consumers are more sensitive to price changes, clothing products often raise prices by launching new products. Brand companies can rely on design and style to attract consumers and rely on new products to raise the price of high cotton prices."

Some industry insiders said.

And this round of price increases can be reflected in the three quarterly reports of the relevant listed companies, such as 002269.SZ, 600137.SH and so on. The gross profit margin of the three quarter has increased.

Li Xuerong said: "it should be said that the price increase of clothing manufacturers in the three quarter is still relatively small, but with the coming of winter, the price range may rise further, and this profit is likely to be reflected in the fourth quarter results."

Zhang Wei, an analyst at Guotai Junan, predicted that the adverse effects of rising cotton prices on the industry will be reflected in the first half of 2011, specifically reflecting the decline in corporate profits and the closure of a large number of small and medium-sized enterprises. But in the long run, the market share of the dominant enterprises will expand and promote the concentration of industries.

Stock selection: focus on brand and channel advantages

Since 2007, clothing as a component of the big consumption sector, both in bull market or bear market, has won the Shanghai and Shenzhen 300 index.

Shenyin Wanguo believes that this is the upgrading of the earnings per share of the listed companies in the apparel industry. On the other hand, after 2007, dozens of excellent brand consumer companies with high growth have been listed, making the structure of the listed companies in the whole industry changed significantly, and also promoted the valuation of the industry.

Data show that since the three quarter of this year, the terminal brand production companies in the industry have performed well, revenue has increased by 38% year-on-year, and net profit has increased by 23% over the same period.

In addition, from the past three years, the brand clothing listed companies, regardless of gross margin or ROE, are better than the industry average, reflecting strong profitability.

"Enterprises with brand and channel advantages have long-term investment value."

Li Yun, a researcher at the capital securities, believes that the company is in the process of being in operation.

And for

Generally speaking, the income of Companies in start-up period is growing rapidly, but often accompanied by high cost and net profit growth less than income growth.

The growing market has a large market space, and its income and net profit have maintained a rapid growth.

While in the mature period, the company's revenue growth is slowing down, but it can increase efficiency through scale effect, supply chain management and so on, making net profit growth faster than revenue growth.

"Generally speaking, companies are facing greater risks at start-up stage, but if they develop well, they will bring unexpected surprises. The growth prospects of companies are worth paying close attention to. They are more suitable for active investors; as for mature companies,

Judging from the current situation, the brand clothing manufacturers at the initial stage are mainly 300005.SZ, which are the main producers of outdoor products, which are mainly in the production stage of the American Apparel and seven wolves (002029.SZ), while the mature stage includes the wedding birds (002154, SZ), Hinur (002485.SZ), Kaiser shares (002425.SZ), YOUNGOR (600177.SH) and other companies.