Textile and apparel industry highlights

Although the growth rate of the main business is flat, the 2015 textile and apparel segment is not lacking. Among them, the transition mergers and acquisitions in the cattle stocks come forth in large numbers. Looking forward to 2016, under the background that there is no explosive growth in terminal demand, transformation remains a hot spot in the industry.

In 2016, external factors in the industry are expected to improve. Cotton prices and international crude oil prices remain low, helping to maintain the stability of corporate costs; *** Devaluation is expected to benefit export-oriented enterprises. Industry leading overseas manufacturing capacity will enable the industry to upgrade from low-cost advantages to the industry. Chain advantage. In addition, the industry's “Thirteenth Five-Year Plan” will encourage smart manufacturing and industrial fiber usage to continue to grow, and leading companies in the sub-industry are expected to usher in improved performance.

Go to the end of inventory

From January to September 2015, the total retail sales of consumer goods grew 10.4% year-on-year, a decrease of 1.5 percentage points from the previous year. Terminal consumption is at the bottom and there is no obvious trend of recovery.

Since 2015, although clothing consumption has basically continued the weak trend in 2014, the growth rate has stabilized and has steadily increased in individual months. From January to September, the year-on-year growth rate was 10.2%, which was comparable to the same period of last year. Although apparel consumption did not pick up, the sub-sectors showed signs of recovery.

Shen Wanhongyuan research report believes that from the perspective of the basic panel block rotation, the sub industry adjustment order is generally sports shoes, casual wear, home textiles, men's shoes, men's, high-end men's and women's wear. At present, the sub-sector has reached the men's wear industry. It is expected that the bottom-line performance of the menswear industry will be more flexible in 2016. The female underwear and baby industry is still in a stage of rapid growth, and the high-end men and women's wear is at a low level and needs to be revived.

The development of industry companies presents two major trends. The first is the integration of channels, the flatter channels, and the increased supply chain efficiency. Taking Anta, Semir and other companies as an example, they actively reduced the level of agents, mastered the operation of terminal data and channels, reduced the price increase rate, improved the cost-effectiveness of products, and ultimately achieved the goal of expanding terminal sales. Followed by the platformization, from heavy assets to light assets, becoming resource integrators instead of producers, becoming a large platform for connecting suppliers and distributors, and fully enhancing the use of resources, such as Haishu House and Xinmin Technology.

M&A transformation will continue

Although the textile and clothing industry has a certain degree of anti-period capability, but with the growth rate entering the new normal, revolving around the transformation and upgrading, the industry has always been a high-risk area of ​​capital operation. It is expected that 2016 will still be the year in which the industry mergers and acquisitions are transformed.

Judging from the direction of transformation, the formation of an eco-cycle and cross-border dual-primary operation around the extension of the industrial chain of the main business is still the main idea of ​​the transition. In the first two types of capital operations, it is still a common practice to predict the target of more incremental growth.

The sports industry will be one of the main directions of industrial transformation. With the introduction of more market-oriented measures in the sports industry, it is estimated that by 2025, the total size of the sports industry will exceed 5 trillion yuan, and the sports industry will usher in a golden decade. At present, the growth in the production and sales of sporting goods, clothing, shoes and hats has slowed down, and the high-value-added, high-margin sports service industry (upstream game resources and media distribution in the middle reaches) has been in a long-term slump. Traditional sports apparel companies need to find a breakthrough, and integration of upstream resources in the industry chain will be the future development trend. In the listed companies, many companies such as elegant birds have laid out a wide range of sports industries.

The basics of the children's wear industry are significantly better than those of other sub-sectors. With the birth peak, the full liberalization of the second-child policy and the increase in residents' disposable income, the willingness to spend on children's clothing has gradually increased. According to the 2012-2015 Children's Wear Industry Report released by the National Bureau of Statistics, the annual growth rate of the total output value of the children's wear industry has reached 25% to 30%. The market capacity of baby clothing and daily necessities in China will reach 227.98 billion yuan this year, 2017. The scale of the children's wear industry will exceed 300 billion yuan. With the further increase in industry concentration, SMEs are gradually phased out, resources are gathered to leading companies, and core competitiveness is improved.

In the face of considerable market prospects, apparel brand companies are accelerating the distribution of children's clothing industry, and most of the existing industry leading brands are in a healthy development stage driven by both the expansion of expansion and endogenous growth. With the increasing emphasis on safety, comfort, certain fashionability and compatibility with the purchase of children's wear, industry share is gradually being concentrated with brand leading companies.

The “her economy” surrounding the huge consumer market for women is another transformation hotspot. According to statistics, currently there are 480 million female consumer groups in China. This group of consumers has more income and more opportunities. The "her economy"-related consumer industry involves a wide range of market capacity of at least 5 trillion yuan or more, and it is expected to become a enthusiasm for the continued growth of the consumer industry in the future.

As the main force of the consumer market, women's groups have shown higher consumer spending elasticity and purchasing enthusiasm in the rising stage of disposable income and social status. In terms of sub-sectors, the growth and investment opportunities in the clothing, underwear, cosmetics, medical cosmetology, tourism, jewellery and other markets among female consumer products are higher than those of essential consumer goods and will become one of the major growth drivers for the optional consumer industry. In addition, the rapid development of the Internet has also given birth to "her economic" business model innovation. For example, various types of vertical e-commerce and social e-commerce based on women as the main body, as well as numerous medical and medical O2O companies that are developing rapidly. These targets have some potential relevance to textile and apparel stocks. In terms of listed companies, Langzi held a number of overseas mergers and acquisitions centering on the fashion eco-sphere. The target of the company is mainly related to cosmetics and other industries, and it has performed positively on market value.

For cross-border e-commerce, online shopping categories mainly focus on clothing, footwear and hats. According to data from the China Electronic Commerce Research Center, China’s cross-border e-commerce transactions in the first half of 2015 were 2 trillion yuan, a year-on-year increase of 42.8% and a penetration rate of 17.3%. In the current downturn of import and export trade, cross-border e-commerce shows a booming trend. In the past five years, the scale of cross-border e-commerce transactions has rapidly expanded from 0.84 trillion yuan to 3.75 trillion yuan, with a compound growth rate of 34.88%. The penetration rate has also increased from 4.0% to 14.2%, and it is expected to continue to improve in the future. Analysts pointed out that the industry is still in an early stage of development and is expected to be one of the important directions for the transformation of related companies.

Multiple benefits improve performance

Beginning in the second half of 2015, influenced by the expectations of the Fed’s interest rate hike, the *** style of the US dollar exchange rate has abruptly dropped below the 6.5 mark on the first day of 2016. The industry believes that the trend of devaluation in 2016 is a high probability event.

After many years of development, high-end textile manufacturing enterprises have accumulated advantages such as production scale, supporting system of industry chain, research and development capabilities, and a large number of customers. Under the strong dollar background, industry exports will obviously benefit from the depreciation of *** and the short-term competitiveness brought by depreciation. Enhanced (price advantage) helps increase the volume of export orders. On the other hand, in the context of depreciation of the local currency, exchange gains and losses resulting from settlement of orders in U.S. dollars will increase company performance. Companies in the industry with relatively large export business, stable orders, and high gross profit margin of the main business will benefit first, such as Luthai A, Dayang Genesis, Vosges shares, and Blum East. In addition, the continuous increase in domestic labor costs is also accelerating the pace of the textile manufacturing industry. It is expected that the shift from the low-end production capacity of the industry's leading players to Southeast Asia in 2016 and overseas mergers and acquisitions seeking to achieve tariff and low-cost advantages will continue.

The low cost of the textile and chemical fiber industry in 2015 is expected to benefit the industry leaders in 2016. In 2015, with the temporary cotton purchasing and storage policy withdrawing from the historical stage, the average cotton price dropped drastically from around 19,000 yuan/ton in the era of storage and storage to around 14,000 yuan/ton, while the international oil price also fell steeply, which resulted in some pre-procurement A large number of high-priced raw materials companies are in a situation of losing sales. The performance in the fourth quarter of 2014 and the first quarter of 2015 was at a low point. With the completion of high-priced stocks, industry costs are expected to improve in 2016.

The textile and apparel industry is in a competitive industry, and industry policies have limited impact on performance. However, in the “13th Five-Year Plan” of the textile industry that has been basically completed, smart manufacturing and industrial fibers are expected to become the key development directions. Among them, industrial fibers are expected to maintain double-digit growth, and the growth of the industry is determined.