Demand Rises, Product Price Rises, Textile And Garment Boom Rises

The 2010 annual report of textile and apparel plate sample companies showed the general characteristics of earnings growth. We believe that the good performance of the annual report of industrial sector in 2010 is mainly related to the recovery of terminal consumption caused by the pick-up of domestic and foreign economies, the replenishment of stocks after 08/09, and the increase of cost driven products.

In 2010, the average operating income of the plate increased by 30.51% over the same period last year, and the total profit and net profit increased by 28.48% and 21.91% respectively.

The gross profit margin of enterprises in the industry increased year by year, and the period cost ratio decreased.

A significant decline in corporate investment income and fair value income in the industry has been the main reason for the slight increase in earnings growth.

The annual report shows that, in the context of inflation, many enterprises have increased raw material procurement in advance, resulting in a year-on-year decline in net cash in business activities, but the overall asset operation capacity and solvency of the industry still rose year after year.

In 2011, a quarterly sample of listed companies of textile and garment sector continued the good business situation in 2010. In addition to the sustained growth of domestic and export markets, one of the important reasons is the positive effect brought by the general price increase in the early stage of inflation.

In the first quarter, the listed companies in the textile and garment sectors all made profits. In the first quarter of 2011, the operating income of the sector increased by 35.86% over the same period.

In the first quarter of 2011, the textile and garment industry (including listing and non-listed company) also showed a good growth trend.

Both the industry's income and profits have increased rapidly and profitability has been further enhanced.

Market expectations for further improvement in the industry, industry fixed asset investment growth continued to rise rapidly, industry export growth exceeded expectations, textiles better than clothing.

Domestic sales continued to grow vigorously.

Judging from the future trend of the industry: we believe that in the early stage of inflation, the effect of raising the price in the name of cost is not obvious for sales volume, but in the middle and later stages of inflation, enterprises will gradually encounter bottlenecks or directly affect the sales volume of products by simply borrowing the cost of products, and only have the advantages of high quality, technological superiority, design characteristics, and channel service advantages.

From the annual reports and quarterly reports, the profitability, profit growth, quality and sustainability of domestic brand oriented clothing enterprises are significantly higher than those of textile manufacturing enterprises. The profit growth rate of home textile sub industry is more prominent in the brand clothing enterprises, and the sustainable growth time of the fast growth in the future is expected to be longer.

Therefore, at present, we maintain a firm and optimistic view of investment in brand clothing enterprises. We also suggest that we should pay close attention to the undervalued opportunities of manufacturing enterprises in the middle reaches of a few basic and special advantages.