The Growth Rate Of Clothing Consumption Will Decline In The CPI Fall Stage.

Our annual strategy report is characterized by the establishment of a brand new research framework for brand clothing companies, which are detailed in the framework of "why?", "how", and "what is". On the road of securities investment research, we have always been anxious to learn, hoping to contribute valuable and valuable ideas to the market, and jointly explore the logic of investment in textile and clothing.

Why create new brand Clothing research framework?

1) the expansion of the middle class consumer population and the increase of propensity to consume will push the brand clothing to continue for the next ten years. 2) however, the competition pattern of the brand clothing industry in the next ten years is totally different from that in the past ten years, and economic development and information Explosion causes simple. market Promotion is no longer feasible. The understanding of brand must be more in-depth and specific.

How do we create our framework?

1) emphasize the importance of brand to clothing; 2) analyze the demand side deeply, and propose two main characteristics of consumer buying behavior in China at the present stage: heavy brand but more pragmatic and rational, heavy brand but low brand loyalty, and then put forward "brand concretion", and think that brand concretion includes two categories: material representation and mental imagery; 3) review "consumption upgrading" and think that consumption upgrading is a selective upgrade, so consumption upgrading will aggravate the importance of stock selection. Therefore, consumer behavior analysis is the starting point of our framework.

What is our framework? Because the difference between men and women is different, so the analysis framework is different from Yin and Yang. Trout's "positioning" theory is the basis of the framework, and the positioning of products or spirits is the core factor that determines brand value. We consider men's clothing to be "inner spiritual identity", while women's clothing emphasizes "external material identity", which defines men's clothing industry as "Yin type" and women's clothing as "Yang type", giving their respective industry characteristics and stock selection ideas, that is, men's overall investment opportunities are undervalued, stock picking should focus on companies with accurate and continuous marketing positioning ability, while women's clothing should break through the "brand breakthrough curve" to both ends, with more opportunities.

Industry strategy: insist on "cotton look at cotton price", continue to give textile sub industry "neutral" rating. The growth rate of clothing consumption will decline in the fall stage of CPI. Next year, especially in the first half of the year, the operating income of the brand clothing listed companies will obviously slow down. Therefore, overall, the investment opportunities of the whole industry mainly lie in the valuation switch, and the clothing sub industry will give the "overweight" rating, and it is recommended to select a stock strategy. From the perspective of our research framework, we recommend the company to search for costumes in special, YOUNGOR and Smith Barney.