The trend of differentiation in textile and apparel performance is clearly more powerful

Due to the recovery in demand and improvement in the operating environment of the industry, the overall growth of the textile and apparel industry in 2010 has been relatively certain. However, the trend of performance differentiation caused by costs is also becoming more obvious. Some brand leading companies with strong cost transferability ability will be able to take the lead in the fierce competition in the future and realize the volume and price of products.

The growth is clearly differentiated

As of February 24, four listed companies in the SW China textile and apparel industry announced the 2010 annual report, and net profit attributable to shareholders of the parent company all achieved growth. Eleven listed companies released performance reports, except for the slight decline in the performance of the four companies. Forty-eight companies issued performance forecasts, of which 42 were pre-hised companies, which occupies an absolute advantage; only 6 companies are expected to worry.

It is not difficult to see from the performance situation that the textile and apparel industry achieved steady growth in overall performance last year. Under the background of the obvious recovery of both domestic and foreign economies, both the export and domestic demand markets have shown a good momentum to create a good operating environment for the textile and garment industry, and the industry will continue to maintain a favorable trend for some time to come.

However, companies in the industry also showed a clear trend of performance differentiation. The main reason for this trend was the increase in costs and the ability of companies to transfer costs.

Due to investment income and government subsidies of up to 320 million yuan, Huamao (000850) achieved total operating revenue of 1.956 billion yuan in 2010, a year-on-year increase of 23.73%; net profit of 360 million yuan, an increase of nearly 4 times year-on-year. Tianshan Textile (000813), which also turned a profit, recorded a revenue of 289 million yuan last year and a total profit of 5.89 million yuan, of which government subsidies amounted to 5.85 million yuan. The development of the two companies' main business is not satisfactory.

Driven by the soaring price of cotton, in 2010, the dramatic increase in domestic apparel fabrics and accessories and the increase in the company’s labor cost further squeezed the profit margin of some companies.

Last year, Jin Feida (002,239), which experienced a 63% year-on-year decrease in net profit, said that its total operating income increased slightly compared to the previous year, but production costs increased significantly, while the selling prices of apparel products in foreign markets were relatively stable, resulting in the company’s The gross profit margin has dropped significantly, and the appreciation of *** has also had a negative impact on the company's profitability.

However, textile and apparel companies, which are also facing higher costs, have better cost transferability and have achieved price increases. The performances of the three home textile enterprises of Vosges (002083), Fu Anna (002327), Luolai Home Textiles (002293) and Mengjie Home Textiles (002397) achieved remarkable growth.

Fu Anna said that the home textile industry in which the company is located is at a rapid growth stage and has a huge market potential. With the continuous improvement of the living standards of domestic residents, the spending power has also increased. Vosges said that the company vigorously explored the market, expanded its sales channels, accelerated the adjustment of its market structure to its advantage market, and raised prices for products in different levels in domestic and international markets.

Leading brands are more awesome

The industry expects that 2011 will be a year in which China's textile industry will experience steady increase in market demand. However, the industry will not change gross margins and fierce competition in the short term. The background of increasing pressure on raw materials and labor costs will increase. Next, the future performance of textile and apparel companies will continue to increase.

On February 24, China's cotton price index (level 328) was 30,365 yuan per ton, and the price of the new station stood at a high of 30,000 yuan, up by more than 10% from the beginning of the year. As one of the main raw materials for the textile industry, 95% of domestic cotton is used for spinning, then weaving, printing and dyeing, and further processing into garments. The price pressure of raw materials is being transmitted to downstream industries such as weaving, printing and dyeing, clothing, and home textiles. .

China's first textile network analyst Wang Qiang believes that the Khmer price will accelerate the polarization of the textile and clothing industry. Due to the strong bargaining power of key enterprises and the large reserve of raw materials in advance, the higher cotton price will have little impact on the production and operation of such enterprises. The most affected are those small and medium-sized enterprises with weak positions in the industry. This is also a necessary stage for the elimination of backward production capacity. Industrial resources gradually flow to high-value-added large enterprises in this process.

As a result, leading companies with certain brand advantages, channel advantages, and product advantages in the industry will gain more market share, orders will grow steadily, gross profit margin will also steadily increase, performance growth will be strong, and they will have more investment value.

SG Securities Shi Hongmei also stated that as consumers upgrade, more and more consumers begin to pay attention to the general environment of dress and taste, personality and fashion. It is expected that domestic brand clothing enterprises will maintain rapid growth during the 12th Five-Year Plan period, and they are also optimistic about clothing. The growth of industry leading companies that provide accessories.