La Natsu Bell Is Now Behind The Capital Crisis Behind The Consumption Of Clothing Industry Weakness.

In the first half of this year, a huge loss of 5 hundred million, and suddenly announced "burst warehouse", the first domestic A+H share listed clothing company La Natsu Bell (603157) today (August 7th) share price continues to bear pressure, as of August 7th closing, La Natsu Bell reported 5.04 yuan / share, fell 2.33%, the latest total market value of 2 billion 760 million yuan.

It is worth noting that this year, it seems that the domestic textile industry is in a bad state of operation. Foreign trade disputes and domestic consumption drivers are not enough, resulting in a significant decline in profitability of the industry. Wind data show that 8 companies in the 53 companies of shwan clothing and apparel home textile industry hit a new low in August 6th, of which La Natsu Bell's share price dropped 41% this year, and the trend of fashion was 44%, while that of modern Boulevard, noble bird and Taiping bird also fell by more than 20%.

The agency believes that the weakening of the macro economy will still have an impact on internal consumption, and the vulnerable position of clothing consumption expenditure is difficult to change in the short term. Although there is already a certain trend of stabilization in domestic and foreign consumption, it is still advised to be cautious about the textile and garment industry.

　　 Industry valuation as a whole goes down

On the evening of August 6th, La Natsu Bell announced that the company recently received notice from the controlling shareholder and the actual controller Xing Jiaxing, and was informed that the 142 million limited listed shares of the listed company limited by Haitong Securities (all A shares) had been lower than the minimum performance guarantee ratio. Because it did not purchase early and did not implement the safeguards for performance, the pledgee had issued a written notice of stock pledge breach, which constituted a breach of contract.

The company's share price continued to drop, resulting in a burst crisis. Since April 4, 2019, the highest 10.15 yuan / share, to the lowest 4.96 yuan / share in August 6th, La Natsu Bell stock price fell more than 51% months in 4 months, has been cut.

There are many similar companies similar to those of La Natsu Bell. Institutional statistics show that in July this year, the textile and garment sector of shwan declined by 3.79% and 3.36 points. Textile manufacturing fell 3.87%, and apparel home textiles fell 5.10%. Since the end of July 31st this year, Shen Wan textile and apparel index has risen 4.09% overall, running 19.95 points of Shanghai and Shenzhen 300 index, of which the textile manufacturing sector rose 3.69%, and the apparel home textile industry rose 2.98%, respectively, running the Shanghai and Shenzhen 300 index 20.35 and 21.06 points respectively.

Wind data show that in August 6th, La Natsu Bell set a record low of 4.96 yuan. On the same day, there were 7 new companies in the textile and garment industry. They were modern Boulevard, Jinhong group, noble bird, Tian Chuang fashion, Song Li Si, Taiping bird and Hasen shares.

In terms of performance, La Natsu Bell had warned at the end of July that the net profit attributable to shareholders of Listed Companies in the first half of 2019 was 440 million yuan (RMB) to 540 million yuan, which was about 286.6% to 329% lower than that in the first half of 2018. The company explained that the decline in performance was due to the dual impact of the continuing downturn in the domestic mass apparel retail market and the company's initiative to optimize the offline channel structure. In the first half of 2019, the company's operating income dropped by more than 20% compared with the first half of 2018 (calculated by the aggregate method).

The decline in the performance of the spinning companies not only La Natsu Bell. The United States State clothing announced the results of the revised announcement shows that the company in 2019 1-6 months net profit of -1.50 billion to -1.00 billion, down 382.41% to 288.27%. The company explained that the main reason for the revision was due to the delay of new product launches in spring and summer in 2019, which failed to meet the market demand in time, resulting in a decline in business revenue.

Consumption is weakening and clothing is weak.

La Natsu Bell's poor performance and huge losses are the case of the company, but the overall valuation of the industry is low. The main factor is the low operating barriers and the difficulty of making money in the industry business mode.

Market participants pointed out that the gross profit margin of clothing and textile industry is relatively high, which can be maintained at 50%, but the net interest rate is relatively low, generally below 10%. This is mainly due to the fact that high sales costs have eroded profits, especially those with low-end products, which require a lot of marketing expenses to publicize brands. In addition, clothing enterprises need to hire more popular hot shops, and the increase in rental costs will also increase year by year.

At the same time, consumption is still bottoming up this year, resulting in a weak consumption of clothing. Fortune Securities pointed out that in the first quarter of this year, consumption showed the characteristics of domestic demand and the fluctuation of external demand. The weakening of the macro economy still has an impact on internal consumption, and the vulnerable position of clothing consumption expenditure is difficult to change in the short term. The external trade situation is still uncertain, and the impact of China US trade grab on export is not yet fully reflected in the data. Although domestic and foreign consumption already has a certain tendency to stabilize the bottom, it is still advised to be cautious.

However, Guoxin Securities believes that from the industry fundamentals, the textile and garment industry and key companies have a certain marginal improvement trend since the two quarter of this year. With the landing of policies such as promoting consumption and tax reduction in the future, the industry fundamentals are expected to achieve a sustained recovery in the second half of the year after the elimination of high base numbers. On the other hand, the degree of differentiation between industries is obvious. It is expected that the quality track enterprises that meet the current consumption trend in the report will still have a relatively good growth rate. Meanwhile, the leading companies will also be better than the industry average in the background of their own operation optimization.