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Textile And Garment Retail Sector Is Still In The Initial Stage Of The Market.

2011/4/20 14:36:00 48

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Cotton Prices Continue To Fall Investment Strategy For Textile And Apparel Retail Sector

In the 2 quarter of the industry strategy, we pointed out that cotton prices fell to become

Textile and apparel retail sector

The catalyst is activated.

Cotton prices continue to fall

In the case of this week, textile and clothing retail stocks performed well, and there was a rare upsurge. Seven wolves (002029), Luo Lai, fuanna (002327), Meng Jie, good luck bird (002154) and Smith Barney rose.

Despite a week's rise, the 11 year dynamic valuation of the seven wolves is only 25 times, that of Weixing shares (002003) is 17 times, that of Meng Jie home textile (002397) is 26 times, that of fuanna is 29 times, and that of Semir is 27 times after the launch, which has a very high margin of safety, and there is still much room for it.

We believe that for these excellent brand retail enterprises, we need to intervene at low valuations and adopt buy and hold strategy.

Next week, it is still recommended to focus on seven wolves, fuanna, Luo Lai, Meng Jie, Weixing, Semir, and good news birds. Considering that this week's general inflation rate is not large, it is likely to show a trend of inflation next week, and then start differentiation.

Cotton prices in recent years as we expected to continue to decline, and other chemical fiber peak season is not only bad, but cold and dry down, viscose staple fiber prices continued to drop 1000 yuan this week, down to 24000 yuan after last week's sharp fall, spandex 40D prices continued to fall 1500 yuan to 55500 yuan, fully shows that the demand for high priced raw materials, mainly due to the obvious suppression of foreign demand.

We believe that cotton prices may stabilize in the 4 quarter, and then there will be opportunities for chemical fiber and manufacturing stocks.

Still in 2011

investment strategy

Invariable: first, continue to be optimistic about textile and garment retail enterprises. Good performance and falling cotton prices may become catalysts for stock prices: 3-4 is an important investment window.

On the one hand, annual reports and quarterly reports are beautiful, and the reliability improvement of the 11 years' performance growth will provide investment opportunities; on the other hand, the autumn and winter clothing orders of textile and garment retail enterprises in 3/4 will achieve great expectations, and the leading enterprises have more than expected expectations; in addition, the determination of cotton prices will also help to dispel the market worries; two, the export manufacturing textile enterprises should have a low gross profit margin; the three and 3-6 months may decide the future cotton price direction, and the downward probability is greater than the upward probability.