A plain year for the textile and apparel industry 2013

Industry perspective

In 2012, regardless of exports or domestic sales, the benefits of the textile industry have declined. According to statistics from the China National Business Information Center, from January to October 2012, the year-on-year growth rate of apparel retail sales and retail sales was 14.2% and 2.4% respectively, which was significantly lower than the 20.4% and 4.9% declines in 2011; 1- In October, the cumulative value of textile and apparel exports was 209.9 billion U.S. dollars, an increase of 2% year-on-year, which is a far cry from the 24.99% growth rate in 2011.

2013 may be the year in which the bottom line of the industry benefits: The four factors that contribute to deceleration in the industry's performance are difficult to change, namely, macroeconomic slowdown, over-expansion of enterprises, suppression of demand caused by high costs, and homogenized operations. Relatively speaking, due to the early start of integration of export manufacturing industries and the recovery of overseas demand, the recovery may be slightly earlier than that of retail sales.

Export-manufacturing enterprises may bottom out slowly: the demand from the US economic recovery will slowly pick up, and the industry will lose capacity after two years of deep integration. In addition, although domestic consumption may still be unsatisfactory, the decline rate will undoubtedly fall below 12 years. The benefits of these export-oriented manufacturing enterprises have improved, and it is expected that textile and apparel exports will remain similar to those of 12 years in 13 years, with little volatility.

Textile and apparel brand retail companies may bottom out in the first half of next year: When consumption decelerates, the initial stage will be an increase in inventories and deterioration of financial indicators (which will deteriorate from season to season in the first quarter of this year), and then shut down stores to reduce supply and adjust structure. Crisis. We expect the traditional store opening and closing season in the first three months of next year, the number of closed stores may be significantly more than in previous years, when the bottom of the entire textile and clothing retail sector may arrive; in the medium and long term, brand companies change the business model, enhance the characteristics Emphasis on endogenous also takes time. From the point of view of a single company, it will take a long time to repair the current damaged balance sheet in the future. Therefore, the recovery after bottoming out is long and slow.

Chemical fiber segment or staged opportunities: The chemical fiber industry has suffered losses for two consecutive years, and there is a strong rebound in price. We believe that next year there will be a rebound in the traditional price rebound time, that is, the coming Spring Festival and August. However, due to no significant improvement in supply and demand, the price rebound is limited and it is suitable for stage intervention.

risk warning

We believe that the bottom of the industry will come next year, but there is a risk that the bottom and the recovery will be long and sluggish, which will cause long-term slumping of manufacturing and retail textile companies, which will affect investor confidence.

From the perspective of investors, domestic investors do not have the same opportunities as Hong Kong and European and American investors to experience the decline of the brand and the stock price plummet (such as sportswear segment, Esprit, China Trends, etc.), and the domestic market basically Investors are the main investors. Investors are accustomed to investing in investment products from top to bottom. They are overly optimistic about the opportunities that future consumption will bring to the individual enterprises, which will make it difficult to stabilize the valuation of domestic textile and apparel retailing in the long run.

Spin-off retail enterprises may sacrifice their profit and loss statements to repair the liability table next year, making their performance lower than expected.