China'S Bid To Sell Cotton Reserves Has Reached A 4 Year High.

Industry operation: continue to boom

Domestic and foreign demand continued to pick up moderately. The growth rate of textile upstream and downstream production continued to rise, and yarn, cloth and clothing output reached a record high in the single month.

In 2010 1-11, the output of yarn, cloth and clothing increased by 17%, 16% and 18% respectively.

Industry investment enthusiasm continued to rise.

Industry efficiency continued to improve. In 2010 1-5, the textile industry achieved a net profit of 71 billion 900 million yuan, an increase of 61.1% over the same period, a gross profit margin of 11.99%, a net profit margin of 4.43%, and a 4 year high.

Spin

Cotton prices continue to be strong due to the new cotton sowing area is lower than expected and the industry continues to boom and cotton demand continues to exceed expectations.

Affected by the gold face and social inventory, some small breed prices have come down.

Domestic cotton market ended 3 years of bear Road, 1-6 month average price increased 35% compared with the same period last year, we expect annual cotton average price to rise 31% compared with the same period last year.

Exports: close to the highest level in June, and continuous improvement in export structure.

The export structure has continued to improve and the ability to resist risks has continued to improve.

In 2010 1-6, China's textile and clothing exports were US $88 billion 880 million, an increase of 22.1% over the same period last year, and exports of US $18 billion 670 million in June, almost unchanged from the highest monthly value of July 2008 in history, which is US $18 billion 680 million.

Export areas are seeing rapid growth in emerging markets such as ASEAN and Africa.

clothing

Domestic consumption continues to boom, clothing

Key sub sectors tracking

The sales volume of T-shirts and jackets in large shopping malls increased by 6% and 13.6% in the 1-5 months of 2010.

Follow suit: the total sales of men's suits and men's shirts increased by 17.01% and 11.32% in the 1-11 months of 2009.

In 2010 1-5, China's exports to the US increased by 27.83% compared to the same period last year.

Towel products export tracking: in 2010 1-5, China's exports of towel products to the United States increased by 18.9% over the same period, and the share continued to increase.

In 2010 1-5, the export volume of worsted fabrics increased by 8.56% over the same period last year.

Investment strategy: choose premium brand clothes and undervalue export outlets.

Plate valuation has a premium.

The average brand clothing 2010PE in the US, Europe and Japan is 15-18 times the average, the brand clothing shoes and hats of Hongkong are 2010PE15-20 times, and the A shares of the key companies in the industry are 24 times PE in 2010, and the plate valuation is reasonable, so as to maintain the industry's "prudent recommendation" rating.