Strategic Report On Spinning And Weaving Industry: Flexibility In Pformation

Terminal consumption is still in the doldrums, and the market of textile and clothing is strong and deviates from fundamentals.

The clothing terminal consumption in 2014 continued the downturn in 2013, and the performance of listed companies continued to be under pressure.

But the total income of the spinning and weaving board is 35.8%, slightly outperforming the Shanghai and Shenzhen 300 (or 31.6%).

The main reason for the deviation from the fundamentals is that the market value of the spinning fabric is generally small, and the poor performance leads to more mergers and acquisitions.

We believe that this trend is expected to continue in 2015, and select the right and decisive targets in the three dimensions based on "past" (Fundamentals), "now" (pformation progress) and "future" (development trend).

Some parts of the plate are expected to have inflection points, focusing on the defensive nature of the resuscitation target.

We believe that the stable and recovery sector is noteworthy and has a strong defensive value.

Based on the "past" performance, we judge that the A share is the home textile - leisure footwear - men's clothing - women's outdoors.

The home textile sector has seen the upward turning point of revenue and profits since 2013Q2, and the 2014Q2 of leisure and footwear has narrowed down. The performance in 2015 is expected to stabilise. Following the subsequent stabilization may be men's wear. 2014Q3's revenue growth has already shown signs of stabilization, but it has not yet been reflected in Li run; because women's clothing has experienced a sharp decline in the performance of 2013 and 2014, 2015 may result in performance reversals, and outdoor performance may continue to slow down.

On the choice of stocks, through DuPont analysis, we recommend paying attention to fuanna, Luo Lai home textiles, Semir costumes, Saturday, happy birds and Georges white.

15 years into a critical stage of pformation, concern is expected to break the ice target.

The brand pformation of "now" is entering the deep water area. The first ice breaking will break the barriers and enter the next new development mode, thus bringing more flexibility.

After the passive inventory in 2012, the light touch network in 2013 and the O2O layout in 2014, with the increasing proportion of brand lines, the two major obstacles that have been bothering the brand pformation and pformation are franchisee interest coordination and supply chain optimization, which are expected to break the ice in 2015.

We expect that in 2015, there will be some breakthroughs in the interest coordination of franchisees, such as rolls of home textiles, Semir clothing, nine Mu Wang and AOKANG international.

And the supply chain reform is expected to make breakthroughs in Semir clothing, the stock and Pathfinder and so on.

The industry is diversified and concerned with the trend.

The "future" industry development mode no longer has the uniformity of channels for the king era. The brand development mode is becoming more diversified. The successful business is expected to break the existing business ceiling and enter a broader space and field.

We focus on three development paths: "cross-border", mobile O2O and customization.

In terms of cross-border, we still choose Maison culture, which has the advantage of industrial chain.

Costume and Pathfinder.

In terms of mobile O2O, we have chosen the brand concept and the stronger appeals of the group and George White.

In terms of customization, we recommend that Lu Tai A, a custom-made online shirt, and Georges white with a large number of personalized customers to be customized.

Manufacturing panel recommendation

And niche manufacturing technology.

Benefiting from the narrowing of the domestic and foreign cotton prices in 2015, the domestic cotton spinning enterprises have a clear trend of profitability and a strong investment certainty.

In 2014 cotton conversion into direct subsidy era, cotton prices began to descend, has been squeezed at home and abroad cotton price difference.

Enterprises in the industry chain are expected to make a profit in 2015, narrowing their gains.

From the perspective of high cost of cotton production, low gross margin and good quality, Huafu color spinning is chosen as the recommended target.

In addition, we have chosen from the bottom up the industry of technology, which is still a leader in minority sectors with growth and market share.

The industry rating is increased to "stronger than the big market", based on the three dimensional selection of deterministic targets.

We believe that based on the "fundamental" recovery of the past, the plate and target can provide defense value; on this basis, the key to break through barriers through pformation is expected to usher in greater opportunities for development. And whether diversification in the relevant industry chain or diversification in development mode is expected to break through the existing business ceiling and enter a broader field, and thus bring greater flexibility to investment.

Moreover, in 2015, the market value of the spinning and weaving board company was relatively small, and its performance continued to be under pressure. The M & A and pformation expectations are still strong, and it is expected to continue to replicate the trend of 2014. Combined with the current market value is still on the historical average, we raise the industry rating to "stronger than the big market".

Finally, in the three dimensions of past (Fundamentals), now (pformation) and future (development trend), the following criteria are chosen as the promotion combination: Maison, Semir, blue, Roland, China and Singapore.