Textile and Apparel: Exports are expected to grow at a new high, and growth is expected to slow

Business Club August 21st

1. The scale of exports breaks the 100 billion mark and the growth rate is expected to slow down. The cumulative export volume of textile and apparel continued to grow. From January to July, the accumulated export volume reached US$10,966 million, reaching 100 billion yuan. From the trend point of view, since the high point of the month-on-year growth rate in April, the growth rate has shown signs of slowing in the past three months, and the export orders index has continued to fall. The weakening effect of external demand began to show. According to the industry classification, the accumulated export growth of textile products has surpassed that of apparel since the beginning of the year, and this phenomenon has changed since June. We believe this is due to the increase in prices of upstream raw materials, which has caused the price of textiles such as yarns and fabrics to rise downstream. Caused by the conduction of the product.

2. Domestic demand is still in a booming atmosphere. The rapid increase in residents' income is an important factor in maintaining the domestic demand. With the advancement of income distribution reform, residents will further improve their consumption expectations. In addition, after many provinces and cities raise the minimum wage, the consumption level of low-income groups will also gradually increase, which will become a favorable factor for continued consumption growth. .

3. The output maintained a relatively rapid growth, and the industry's investment in fixed assets maintained a relatively high level. From January to July, the output of yarn was 15,084,100 tons, an increase of 15.29% over the same period of last year. The cumulative increase of cloth production was 37,318 million meters, an increase of 21.25% over the same period of last year. Clothing output was 16.6 billion, an increase of 15.32% year-on-year. Due to the relatively high domestic demand, the growth rate of fixed asset investment in the textile and apparel industry continued to grow at a faster pace in July. We expect investment growth will continue to remain stable.

4. The prices of major raw materials are mixed, and it is expected that the cotton price will start to fall after a large number of new cottons are listed . Due to the existence of an alternative relationship between staple fiber and cotton, the continuous rise in cotton prices has given market space to staple fiber, so the price of viscose staple fiber has increased significantly in the previous period. At present, the rising price of viscose staple fiber advances has come to an end. The spot price of Guomian 328 continued to maintain its upward trend. At the end of July, it closed at RMB 18,200/ton, which rose slightly by 0.52%. The market price of viscose staple fiber had fallen from the highest price of RMB 20,300/ton in April to RMB 17,250 at the end of July. / Ton nearby.

Investment suggestions: The key economic data of the world's major economies have not been effectively improved, and the decline in demand will remain the main factor constraining exports, including the tightening of economic measures in Europe, the increase in real effective exchange rates, the increase in labor costs, and the elimination of tax rebates for some commodities. Under the influence of factors, the growth rate of exports in the next quarter is expected to slow down. We maintain a “neutral” investment rating for the entire textile and apparel industry. For individual stocks, we are still optimistic about companies with brand advantages and network expansion capabilities such as Zhebao (25.63, 0.03, 0.12%), Septwolves (32.42, -1.32, -3.91%), and Meibang (24.60, -0.90, -3.53%). ), We will carry out an in-depth analysis of these companies in the follow-up report.