Industry Stock Market: Textile And Clothing Sector Performance Reported Frequently, Industry Prosperity Increased

The textile and garment industry has recovered since this year. Affected by the increasing demand, the prices of raw materials in the upstream have risen. For example, the price of spandex market remains high, the spot supply is tight, and the product supply is in short supply; Polyester filament prices rose this week, with DTY increasing by 400 yuan / ton, POY by 325 yuan / ton and FDY by 250 yuan / ton.

Industry insiders said that although Cambodia's epidemic situation has improved recently, Vietnam's epidemic situation is still severe, textile and clothing orders continue to flow back to China, and many companies have received orders. Some enterprises have been queuing up to August for continuous growth of orders, and the upstream raw materials are also in a tight spot price rising trend under the sudden increase in demand. The start-up rate of several textile clusters has risen sharply, and Changshu and Haining have now exceeded 90%.

Textile and garment industry

Ushering in high prosperity

Textile and clothing is an important export product of China. China's textile and clothing exports account for more than 30% of global exports. In recent years, although the textile and garment industry in Southeast Asian countries has grown rapidly, the volume is still small. Vietnam and India account for about 6% of the world's textile and clothing, and the rest of the world accounts for about 1%.

Affected by the overseas epidemic situation, the operating rate of Southeast Asian countries decreased, and a large number of overseas textile and garment orders returned. The domestic textile industry got out of the predicament of last year and showed a high prosperity. According to the data of China Textile Import and Export Chamber of Commerce, in the first half of the year, domestic textile and clothing exports maintained a steady growth, with a year-on-year growth of 3% and 12% in terms of RMB and US dollar, respectively, which also maintained a rapid growth compared with the same period in 2019. Influenced by masks, textiles decreased year-on-year, while clothing grew rapidly driven by the recovery of external demand.

Since April this year, China's cotton textile boom has been at a good level. The agency said that under the guidance of intelligent manufacturing, textile and garment enterprises ushered in growth in the second half of this year, and textile manufacturing will also usher in a period of capacity saturation due to the influence of Indonesia's order transfer. It is optimistic that the sector will usher in structural growth in the second half of this year.

Huaxi Securities is optimistic about the clothing sector from three aspects, including: 1. Plate valuation is at the bottom, compared with other optional consumer sectors, it has cost performance; 2. The recovery of clothing sector is better than that of other optional consumer sectors. Compared with that in 2019, the recovery of clothing sector is better than that of household appliances, catering, etc; 3. Under the background of stock shortage and the return of national tide, the terminal discount rate is improved, and the profit margin improvement may exceed the expectation.

Semi annual report of textile and garment

Large area pre happy

In the A-share market, the textile and clothing sector performed well this year, with the industry index increasing by 32%. The share prices of six stocks including Jinhong group, golden hair rabbi and Bank of China cashmere industry doubled within the year, and 10 stocks including taipingniao and baoxiniao increased by more than 50%.

In the stock price rise at the same time, the textile and clothing plate half year report performance large area is happy. As of July 15, 37 textile and garment listed companies in the two cities have announced their semi annual report performance in 2021. According to the median value of the expected increase, 26 companies achieved a year-on-year increase of more than 50%, of which 20 companies' performance doubled year-on-year.

Jinhong group, Xingye technology, langzi Co., Ltd. and Senma Clothing Co., Ltd. have increased dozens of times over the same period of last year. Jinhong Group expects to achieve a net profit of 126 million yuan to 139 million yuan in the first half of 2021. For the performance reversal, the company said that the epidemic factors were basically eliminated in the first half of this year, and the offline channel business showed a comprehensive recovery growth. However, due to the previous accumulation of excessive growth, in the performance forecast disclosure, Jinhong group appeared a word limit.

In explaining the reasons for the performance increase, Societe Generale said that in the first half of 2021, it benefited from the restorative growth of the domestic shoe and clothing consumer market and the return of some overseas orders to China due to the epidemic situation, which led to the improvement of the industry prosperity.

At present, the average p / E ratio of the textile and garment industry is 57.6 times. Among the 20 stocks that have doubled the performance of the interim report, the P / E ratio of less than 30 times can be found everywhere. The latest valuation of xunxing shares, Huijie shares and seven wolves is less than 15 times. In terms of institutional consensus forecasts, 7-share institutions such as robust medical, Amoy and Blum Oriental have a bullish space of more than 50%; Kairun shares, Jiansheng group and other 6 shares also have about 30% room for growth.