Textile And Clothing Industry Investment Strategy For 2019

In 2019, the fabric workwear industry has not yet clearly recovered, and the transitional enterprises have gone to the counterfeit and kept true. The rebound in cotton prices and the depreciation of the Renminbi are favorable for upstream fabric manufacturing; the growth of e-commerce has slowed down; the new trend of retail format upgrades; branded workwear companies have actively improved their supply chain governance, and they have been frequent; Companies seeking to lead the business model and performance growth, taking into account the more prosperous sub-categories.

Investment points:

The performance of upstream and downstream in 2019 is differentiated, the growth rate of workwear retail sales continues to decline, cotton prices have stabilized and rebounded beyond expectations, accelerated depreciation of the RMB has strengthened the performance elasticity of textile companies, and valuations have fallen. In the first three quarters, the overall net profit of the industry increased by 7.13%, of which the net profit of fabric manufacturing increased by 17.6%, a significant recovery; the industry valuation fell by 10%.

Xun Xunmiao's stocks that actively seek change and pragmatism are 17 years of stock selection logic. The 16-year restructuring and transformation is still the strongest driving force of the stock price. In contrast, some of the transformational stocks in 15 years have seen a big correction this year.

In 19, the cotton price is likely to be stable, the performance of textile companies will stabilize, and the transition and upgrade expectations will be concerned. Since March 19, the replenishment cycle of textile companies has driven cotton prices up 36%. At present, there is no gap between supply and demand in the market. The key to cotton prices is the storage situation in March next year. It is estimated that cotton prices will stabilize in the first quarter. The textile enterprises benefited from the improvement of inventory and the increase of order concentration.

放缓 The slowdown in e-commerce growth has led to new retail formats, and the innovative retail model is just in time. Fast fashion brand represented by ZARA, deeply cultivating supply chain governance, building with accurate information flow and speedy logistics

Accelerated implementation of the concept of brand companies' supply chain flexibility, online and offline resource consolidation is imminent, and companies focusing on supply chain governance services are emerging.

Brand workwear shows the trend of industrial grouping, and the pace of merger and expansion to build a brand matrix is accelerating. The high-end luxury goods group represented by LVMH breaks the bottleneck of the single brand audience and continues to acquire and leverage synergy. This year, overseas brand acquisition projects have been launched one after another, and it is recommended to pay attention to light luxury brands that are experiencing tax upgrades and fast-growing designer brands.

Our investment strategy is based on pragmatism, and we recommend companies with clear transformation and upgrading strategies, strong executive team execution, and advanced business models and performance-oriented companies, taking into account the higher prosperity and subdivision categories.

Recommended the young and strong to seek the transformation of the company's MediaTek shares, backed by the large group has assets expected to inject Shandong Ruyi, and the supply chain governance new business development smoothly search for special.