Textile And Apparel Investment Strategy In 2011: Finding Smiling Curves

Firmly optimistic about the 2011 textile and garment industry, respectively, to increase the clothing and textile sector to buy and increase ratings.

With the increasingly significant position of the domestic demand market and the rapid increase of the proportion of the middle and high income groups, the income level of the urban and rural residents is "

With the further improvement of urbanization level, three or four line cities

Industry export growth will drop somewhat.

The US's new round of quantitative easing and the European debt crisis have kept the unemployment rate in the developed countries at a high level. The good export situation this year is due to the strong stimulus policies of governments and the 09 year low base effect.

The pressure of RMB appreciation will also be further enhanced in 2011, mainly from: 1, the political pressure of developed countries such as the United States, Europe and Japan; 2, foreign exchange reserves, trade surplus and foreign direct investment and other related indicators of exchange rate have risen sharply in the past ten years; 3, the international hot money has poured into the Chinese market to gain huge profits.

Continuous decline in cotton production, over expected demand recovery and low inventory will make high cotton prices become a norm. It is estimated that cotton prices will fluctuate at a high level of 2-2.5 million / ton next year.

Viscose and polyester were also soaring under the cotton price.

High raw material prices will be the biggest risk facing textile and garment enterprises next year.

The export growth rate of the whole industry is expected to drop to around 10% in 2011 without having a low base effect.

Optimistic about the industry at the two ends of the smile curve, reasonable valuation of the industry.

Enterprises at the two ends of the smile curve can earn higher added value, but also have stronger ability to resist risks.

For the left side enterprises of the smiling curve, we think that the dominant enterprises should continuously strengthen R & D investment, increase scale advantages and product grades, and strive for pricing power so as to reduce the original price.