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The Economic Growth Structure Will Be Pformed Into &Nbsp; The Long-Term Prospects Of The Clothing Industry Are Still Promising.

2011/1/4 16:49:00 42

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Long Term Pformation Of Garment Industry

The textile and garment sector of Hongkong market has not performed well recently. Lining (02331.HK) and Anta sports (02020.HK) have fallen more than 15% since December and BELLE International (01880.HK) has fallen by nearly 10%.

Despite the weak trend in recent years, the textile and garment sector of the Hongkong market has been slightly better than the Hang Seng Index since 2010.

Along with the pformation of China's economic growth structure,

Textile and garment industry

It is expected to maintain high growth, and the long-term prospects for the industry are still promising.

China's economic growth in the past mainly depends on exports and investment, but the proportion of future consumption of GDP will rise steadily, which means that the overall growth rate of consumption will be faster than the growth of GDP.

Since 2009, China's total retail sales of social consumer goods have increased to a higher level than the same period. The current growth rate is still above 18%, far higher than the growth rate of GDP during the same period.

It is worth noting that the growth rate of textile and garment retail sales is faster than the total retail sales of consumer goods.

Data show that 1-10 months of this year, domestic textiles

Tired clothes

The total sales volume was 458 billion 100 million yuan, an increase of 26.97% over the same period last year, much higher than that of the total retail sales of social consumer goods.

On the fast track of consumption, textile and apparel are among the fast cars.

In 2010, China's per capita GDP will exceed 4000 dollars. According to the experience of other countries, the per capita GDP will be a fast growing period of consumption from 3000 to 8000 US dollars. With the advance of the 12th Five-Year "plan" income distribution reform, the consumption related themes will become the investment hot spot in the long term.

There are three main concerns in the market for textile and garment companies: first,

Raw material

Prices continue to rise.

Cotton prices have risen rapidly this year, and cotton prices have risen more than 100% in the short term since the second half of this year.

The state has introduced a series of measures to restrain cotton prices from rising too fast, and cotton prices did drop after November, but they are still at a historical high.

It is predicted that in 2011, the gap between supply and demand of cotton is still as high as 3 million tons, and the supply and demand determines that cotton prices will still be difficult to recede in the short term.

Second, the appreciation of RMB makes exports under pressure.

After the two exchange reform in June 19th, the RMB exchange rate rose sharply, although the US dollar index remained at a relative high level of around 80, the RMB exchange rate has hit a new high this year.

Third, labor costs are rising rapidly.

In recent years, after the Spring Festival, the phenomenon of "labor shortage" appeared almost every year.

In the early December, two months before the Spring Festival, some coastal enterprises had already been embarrassed by the loss of old people and the difficulty of new recruits.

China's population structure determines that the labor cost of manufacturing industry will continue to grow at a high level in the future.

Because of rising raw material prices, rising labor costs and RMB appreciation are expected to remain in a longer period of time, brand manufacturers with stronger bargaining power deserve more optimism.

In terms of valuation, the apparel industry's earnings per share in 2011 is about 14 times. Considering the industry's expected growth rate of around 20% in the next few years, this valuation is quite attractive.

In many sectors of the industry, home textiles and men's clothing, which are in a growing stage, are more worthy of attention than the sports products that are gradually coming into maturity.