Dongguan Securities: Pay Attention To Investment Opportunities Of Upstream Dyestuff

In February, the industry significantly outperformed the market. In February 2015, the industry won the market. This month, Shin Wan's textile and garment sector rose by 7.77%, a big win over the market, of which textile manufacturing and apparel home textiles rose by 9.17% and 6.53% respectively. Textile and garment sub sectors rose, of which the silk industry rose the largest, up 20.06%; the excipient industry rose the smallest and increased 2.07%.

Industry operation: inside and outside Cotton price The price of cotton continued to shrink and the difference between domestic and foreign cotton prices continued to narrow. In February, the average monthly price of domestic 3128B cotton was higher than that of the international cotton price CotlookA (FE), and the average monthly tariff of 1% yuan was 2478.35 yuan / ton, narrowing 499.55/ tons from last month, and continued to narrow. Viscose, polyester, yarn, grey cloth and other prices continued to decline. Exports remain weak. Domestic demand growth is still weak.

2014 annual report: as of March 3rd, Textile and clothing 37 listed companies in the industry have disclosed the 2014 performance bulletin, and 6 companies have announced the 2014 annual report. Judging from the companies that have announced the results and annual reports, most textile manufacturers can maintain a certain growth rate, but the four quarter's growth rate is lower than expected and the annual growth is lower than that of most companies. Most of the apparel home textile listed companies continue to decline in performance, men's listed companies are much lower than expected, the performance of home textile listed companies has maintained a certain growth rate, the results are in line with expectations, Semir casual apparel performance in line with expectations, the United States and apparel and search performance in the lower than expected period.

Investment strategy: textile manufacturing industry: maintain prudent recommendation rating. Domestic cotton prices continued to fall, and domestic and foreign cotton prices continued to narrow. However, because of the weak demand for downstream demand, the price of cotton yarn and grey fabric continues to decline. Under the condition that the downstream demand has not recovered significantly, textile prices will continue to fall. It is expected that the industry's leading performance in the first quarter of 2015 will not exceed expectations. The recent devaluation of the RMB against the US dollar is conducive to easing export pressure. Maintain prudent recommendation ratings for the industry, and continue to focus on undervalued leading enterprises such as Lu Tai A.

Apparel home textile industry: maintain prudent recommendation rating. Domestic terminal retail growth is still lingering at the bottom, but after more than two years of adjustment, the industry boom is expected to gradually rebound in 2015, maintaining prudent recommendation rating for the industry. Still maintain the early view, the middle term can choose stocks from the three main lines: the undervalued stocks that are constantly improving to the fundamentals, such as Luo Lai home textiles, fuanna, Semir, Pathfinder, etc., and stocks that are likely to reverse their difficulties, such as Jiumu Wang, long Zi stock, AOKANG International, etc., are expected to benefit from state-owned enterprises to change their stocks, such as the China International Group.

March key recommendation Upstream dye industry Faucet. The main logic is tightened up by environmental protection, tight supply of dyes and acid, disperse dyes and reactive dyes have been continuously raised in recent years, and dye industry has a high degree of market concentration. The industry leader in 2015 has achieved rapid growth. It focuses on leading shares of listed companies such as run earth shares (002440), Zhejiang Longsheng (600352) and anoits (300067).