Brand Clothing Plate Ushered In Mid Buying

From a fundamental point of view, the growth rate of restrained foreign demand and the long repair period after the collapse of raw materials are textiles.

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M0 upward, clothing domestic demand growth rate remained high.

In 2011 1-10, the total retail sales of garment enterprises above the limit increased by 24.10% over the same period last year, a slight decrease of 1.7 percentage points compared with 2010, but significantly higher than the average of 19.3% in the past ten years.

The growth rate in October before 2011 was lower than that in 2010. The main reason was that it was too cold in 2010 winter, and earlier in winter than in 2011.

Besides the long-term factors related to domestic economic restructuring, residents' income growth and urbanization, clothing consumption is also dependent on the money supply situation in the short term.

We chose the monthly historical data of M0 and total retail sales growth rate since 2007, fitting the two index correlation coefficient as high as 0.822, proving its significant correlation.

Next year, under the combined action of CPI downside, slow external environment restoration and domestic economic restructuring, the monetary policy is expected to shift to a relaxed style. M0 growth is expected to increase.

According to the Dongxing macro group's calculation of M2 in 2012, the growth rate will be 16%, which is significantly higher than the 13% level in 2011.

Based on this calculation, we believe that the growth rate of domestic clothing consumption in 2012 is expected to remain at a high level of around 25%.

CPI downlink, "volume increase" into a leading factor, brand clothing will double benefit.

Next year's easing of monetary policy is mainly based on the gradual downtrend of CPI.

From the 2011 full year data, CPI rose month by month, and driven by the rising price of raw materials and the upward trend of CPI, the garment enterprises were clearly differentiated.

Most of the small and medium-sized garment enterprises are eroded by profits from rising costs and have difficulty in survival. Brand clothing enterprises, however, have shifted their prices to consumers because of their strong bargaining power, pushing up the retail price of commodities, but to a certain extent, they have suppressed their willingness to consume.

According to the forecast of Dongxing securities macro strategy group, the growth rate of CPI in the first half of 2012 will fall to the lowest level of 2.2%. In the second half of the year, the growth rate of CPI will rise from the base of 2011, but it will remain at a moderate level below 3%.

Referring to the data in 2011, the growth rate of clothing retail sales is significantly lower than that of the same period in 2010, while the growth rate of apparel CPI and RPI data has been rising month by month. This is precisely because of the upward trend in the cost of raw materials and CPI, clothing companies have passed the price increase to consumers to pass on the cost, thereby inhibiting consumption intention.

It can be said that the total retail sales volume of clothing in 2011 has reached a new high speed, basically driven by price.

In 2012, with the CPI and raw material costs falling down and stabilizing, the consumer willingness to be depressed by price will be released effectively, and the price increase factor will be weakened. The growth of clothing consumption will become the main driving factor to drive the total retail sales of clothing to maintain a high growth rate next year.

Under this logic, the branding enterprises in the domestic market will benefit from the demand of the whole industry for their outstanding ability in brand, channel and scale.

In addition, the influence of the beneficiary brand, market positioning and operation mode and other factors, the brand enterprises have strong bargaining power, and the price will remain at the current level at least in 2012.

Based on this expectation, brand clothing will benefit from the overall demand volume and gross margin.

Upstream relative income will be met.

Brand clothing sector valuation center continues to move upward.

From the valuation point of view, we compared the valuation of the two plates of manufacturing textile and clothing and terminal brands in the past ten years.

Due to the poor performance of listed companies and the low performance of most companies, valuations in the past ten years have fluctuated around the dynamic PE center of 33 times.

In contrast, the valuation center of brand plates has increased significantly since 2003, and the plate valuation center has been 23 times since 2003, and the central PE backbone has moved up to 26 times since 2008.

From an entity perspective, the upward trend of the valuation of the brand sector is compatible with the growth trend of residents' income, the pformation of economic structure and the advocacy of consumption.

In addition, the structural change of A share apparel listed companies is also an important factor in the rise of valuation. From the evolution process of the clothing plate composition, the listing of the seven wolves (35.83, -0.37, -1.02%) in 2003 opened the prelude to the landing of the A brand by high-quality brands, and then the frozen period of more than 5 years. With the 2008 listing of the US bond market, the clothing sector officially broke away from the embarrassment of the previous speculation and no performance.

In 2008, starting from the United States, 16 textile and garment enterprises were listed, of which 12 were brand enterprises. From the market value, the listed companies accounted for 43% of the total market value of the textile and garment sector, and 37% of the brand enterprises accounted for 43%.

Enterprises that account for more than 40% of the market value of the whole plate have been listed since 2008. Although textile and clothing belong to traditional industries from an entity perspective, they have been defined as new ones in the capital market.

Due to the short time of the main stock market of the clothing sector, the current market's perception of the structural change of the plate is not thorough enough. It is simple to refer to a single historical mean and has little reference. We suggest that we should take a dynamic view of the valuation of the clothing sector.

With more high-quality brand enterprises listed, the overall valuation center of clothing sector will maintain upward trend.

Long term valuation is upward, but the establishment of the purchase point also needs to refer to the trend of the whole market return.

According to the relative A share price earnings ratio and relative income of textile and clothing sector, the relative trend of the textile sector's relative market return and relative price earnings ratio is the same trend, which is consistent with the characteristics of the periodic plate. When the ratio of the plate and the index price to earnings ratio moves up, the relative relative return of the relative index of the board gradually increases, while the ratio of earnings to earnings ratio descends, and the relative return is downward.

The establishment of the purchase point should be based on this rule, that is, the relative profit increase during the upward movement of relative valuations while the ratio of P / E ratio is low.

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Compared with the typical cycle characteristics of the textile plate, the garment plate shows the opposite trend, which is due to the consumption resistance of the garment plate.

The ratio of dynamic price to earnings ratio and relative income change of clothing sector and market show a reverse trend. The gradual increase of P / E ratio is the process of relative market income decline, that is, the buying point of the clothing sector should be established at the time when the relative index price earnings ratio is high, so as to enjoy a gradual decline in the ratio of P / E ratio and the increase of relative return rate.

At present, the ratio between textile and garment sector and market P / E ratio is at a higher level in history, especially the clothing sector has reached a new high.

Referring to the above logic, the two sector is at a reasonable buying point. In the future, with the relative value of the market restored, the relative profit of the garment sector will gradually increase as the P / E ratio decreases.

Key companies rating

Wedding bird (12.02, -0.06, -0.50%) (002154): it is estimated that the growth rate of the company's main brand will be raised to 15% every year. San Jie Luo will guarantee the opening number of at least 100 new stores each year due to its small base.

The epitaxial development of the company is also reflected in the multi brand extension and multi brand extension of the main brand, which has extended from the classic and business series to leisure, leather shoes, leather goods, underwear, sports and women's wear series.

The company's business style is more positive than before, and growth is expected to accelerate and maintain the "highly recommended" rating.

Mei Bang dress (27.43, -0.32, -1.15%) (002269): the market most concerned about the company's inventory problem has obviously appeared to optimize the inflection point, in 2011, the three quarterly report shows that the proportion of company inventory fell.

It is expected that the company's future terminal expansion will return to franchising, and the target market is mainly under the second tier cities.

The 2011-2013 year net profit of the company is expected to be 1 billion 121 million yuan, 1 billion 633 million yuan and 2 billion 224 million yuan, up 47.90%, 45.72% and 36.17%, respectively, corresponding to EPS of 1.12 yuan, 1.63 yuan and 2.21 yuan respectively, and the "highly recommended" rating is maintained.

Roley home textile (77.10,0.10,0.13%) (002293): the company's multi brand strategy is the most mature and the most fully promoted among the three listed home textile enterprises.

At present, the company has set up a gradient brand matrix to adapt to all levels of the market, and the proportion of sales of main brand Luo Lai has been decreasing year by year.

As a leader in home textiles, the company benefited from the rapid growth of the industry. With the strength of the company, it should enjoy a relative valuation premium and give a "highly recommended" rating.

Nine Mu Wang (25.08, -0.01, -0.04%) (601566): the company's products, with strong varieties of men's trousers as the guard, the upper garment for attack.

In the future, we will continue to maintain the dominant position of men's trousers in the main products, with the influence of men's pants on consumers to promote the upper garment consumption.

In the future, with the comprehensive promotion of the sales of the whole series of products, the proportion of male trousers in the overall sales structure will gradually drop to 30%.

The company has a steady and reliable strategy, clear strategy, deep internal strength, and a calm style. It is expected that the annual growth rate will be at least 30% per year and maintain the "highly recommended" rating.