Textile Clothing Industry Weekly: Textile Clothing Still Is Still Located In The Valuation Repair Cycle

At the invitation of the US side, the Chinese leader of the Sino US comprehensive economic dialogue, Liu He, held the seventh round of Sino US economic and trade consultations in from February 21st to 22nd with the US trade representative Wright F Ze and the finance minister Mnuchin Washington. It was only 5 days away from the last dialogue between the two sides.

The time limit for China's tariff increases to 25% at the time zero in March 2nd announced by the United States has been getting closer and closer. Every process and final result of Sino US economic and trade consultations have affected the trend of China's textile manufacturing enterprises' export.

In the US tax list, there are a total of 917 textile industries involving all kinds of textile yarns, fabrics, industrial finished products and some household textiles. The annual export volume of these products exceeds US $4 billion.

We believe that Sino US economic and trade consultations will be difficult to reach a unified conclusion in a short time. China's textile manufacturing enterprises should actively seek reform measures to deal with this new international trade situation.

If we actively arrange the industrial chain in Southeast Asia, we can also reduce the impact of Sino US trade friction on China's textile exports while reducing costs.

Based on this, we recommend 601339.SH, which has a positive layout of Vietnam's capacity. The company has a full order, and its capacity will be further released in 2019 and 2020, and its performance will continue steadily upward.

As of 2019 02, 22, the textile and garment industry has a 20.68 TTM (-11.05) rolling rate over the past year, a change of -11.05 from the historical average since 2005.

Since the beginning of the year, the investment sentiment of the A share market has gone up, but the spinning and weaving board has limited growth. It is twenty-fifth in the 28 sub sectors of Shen Wan.

We believe that this is the right time to deploy beautiful products and still have valuations to repair space stocks. We continue to recommend casual wear + children's wear leading Semir clothing (002563.SZ), high-end high-end subfield leader 002832.SZ and 603808.SH.