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Textile Industry: Winter To &Nbsp; Can Spring Be Far Behind?

2011/12/13 9:32:00 24

In 2011, the textile industry experienced winter.

In 2011, prices of raw materials dropped rapidly and production costs continued to rise.

Exit

Under the superposition of multiple factors such as poor situation, the boom of the textile industry has continued to decline. It is not too much to describe this extreme situation with the industry in the winter.

In 2012, industry spring is worth looking forward to.

Standing at the present time, we are looking forward to the future industry.

Investment

Opportunity is not pessimistic, because from the perspective of cost side, demand side and macro environment, the industry is expected to usher in a spring of recovery in 2012.

1) cost side improvement: we judged that the history of soaring prices of raw materials in 2011 has become the past, 2012.

cotton

And other raw materials prices will show a trend of bottom shock, which will play a positive role in the smooth completion of the industry to inventory, production and operation activities on the right track.

2) the demand side is stabilized again: the cost of raw materials will help to ease the restraining effect of excessive price of terminal clothing on demand, and the future terminal price is expected to be adjusted.

3) the macro environment tends to be loose: the recent drop in prices and the lowering of the deposit rate all release a positive signal, that is, the macro environment will become more relaxed in 2012, and the improvement of the economic situation and the improvement of the credit environment will help to accelerate the recovery process of the industry.

Investment strategy:

Looking for sunshine in winter.

We believe that the slump in the textile industry does not mean that there is no investment value at all. Instead, at the bottom of the industry boom, we should look for those investment targets whose value is relatively high, business earnings growth is better than market expectations, and the trend of investment is dragged down by valuation.

The catalyst for the start of the textile sector: 1) the bottom of cotton price is confirmed, there is a trend of rebound; 2) the concerns of poor export situation in Europe and America have been effectively alleviated.

A recent positive signal: depreciation of the renminbi.

Risk warning: the European debt crisis and further deterioration of the European and American economies will directly impact the demand for textile industry, and the industry's earnings forecast will also deteriorate.