Apparel CPI falls and industry trends stabilize

Last week, the absolute rate of return of the textile and apparel sector was 5.51%. During the same period, the Shanghai Composite Index was up 4.12%, the CSI 300 Index was 5.01%, and the textile and apparel sector outperformed the broader market by 0.5%. Among them, the absolute return rate of the textile sector is 5.07%, the relative return rate is 0.06%, the absolute return rate of the apparel sector is 5.91%, and the relative return rate is 0.90%.

The top two segments of the rise or fall are the outdoor products and leisure apparel industries, with an average increase and decrease of 12.45% and 6.68%, respectively. After the rise and fall, the two sub-sectors were men's and shoes, with an average increase of 4.80% and 3.87%. After this round of decline, the average price-earnings ratio of the home textile industry has fallen below 15 times. We believe that if investors hold a medium- and long-term cycle (investors with a three-month investment cycle and above), they can choose to allocate home textile stocks in a timely manner. In the short-term, the industry is currently not booming, and the search for companies with relatively stable performance is relatively high.

Industry News. 1) Alibaba Group announced that its online retail transaction volume exceeded 100 billion, of which the growth rate of third and fourth-tier cities was higher than that of the first and second-tier cities. 2) The Italian luxury brand PRADA (Prada) released its 9-month consolidated financial report yesterday. As of October 31 this year, the group’s 9-month net income was 2.34 billion euros, an increase of 35.2% from 1.73 billion euros in the same period of last year. . Listed company dynamics.

1) Huafu Spun Yarn received cotton subsidies in the fourth quarter of 5 million and in the first quarter of 2013, 5 million. 2) Luthai A repurchased 43,148,274 B shares as of November 30, 2012, which accounted for 4.28% of the company's total share capital. 3) Pathfinder's increase in holdings of major shareholders 4) Hinnor 750 million yuan 2) Announcement on the cancellation of pledges and pledges of shares held by the controlling shareholder in Hinnor and Smith Barney. Industry-related data: 1) Last week, the COTLOOKA index rose by 0.18% to 82.35 cents/lb. Domestic 328 cotton rose slightly by 0.39 percentage points to 18,991 yuan/ton. Viscose staple fiber fell slightly by -1.70%, and polyester staple fiber rose by 1.16 percentage points. 2) In November, China’s retail sales of consumer goods increased by 14.9% year-on-year in the month, which was an increase of 0.4% from the previous month. 3) The National Bureau of Statistics released the November CPI data. In November, the national consumer price index (CPI) rose by 2.0% year-on-year, of which the clothing CPI rose by 2.3% year-on-year.

Investment Advice.

Affected by the low base in the fourth quarter, we expect the YoY growth rate of consumption in December to increase, but the overall end-use consumption is still not satisfactory. In December, the lack of favorable factors in the industry, the industry investment opportunities are smaller. In the second half of 2012, the clothing sector has seen a five-month slump. The entire sector has fallen by as much as 30%, and the industry PE is at a historically low level. The market for listed companies in 2012 is expected to be gradually reasonable. In the second half of the year, the textile company's low performance and low performance appeared. However, the industry inflection point still needs to wait.

At present, end-user consumption is still buoyant, and it is difficult to judge future consumption trends. We expect that the industry in December will be dominated by S&D at the bottom, and there will be less investment opportunities in the industry, and it will be possible to focus on listed companies with stable performance.