China's textile and apparel industry in the first half of business analysis

The 2012 semi-annual report of listed companies in the textile and apparel industry has disclosed the completion of small series of home textiles, men's wear, casual wear, women's wear and outdoor five sub-sectors with industry representativeness, and analyzes its key financial indicators.

Overview of the overall situation of the industry In the first half of the year, affected by the slowdown in economic growth and the sluggish consumer market, the growth rate of revenue in various sub-sectors was affected by varying degrees. Among them, the outdoor industry and high-end brand apparel industry still maintained rapid growth; the home textile industry's market demand was inhibited, and revenue growth decelerated more; competition in the mid-end brand apparel industry intensified, and there was limited room for growth in gross margins, which currently grows from an outlier. The endogenous growth of the refined management has been gradually transformed; the casual apparel industry has been affected by the international fast fashion brands, and it has been impacted by e-commerce. It is currently in the destocking phase, and the growth rate has dropped significantly.

Sub-sector analysis of the outdoor industry: Due to the adverse weather and the impact of early shipments in the first quarter, Pathfinder (300005)'s second-quarter revenue growth slowed compared to the same period last year. At the same time, the company's gross profit margin and net profit margin both declined year-on-year, while the period expense ratio increased year-on-year.

Men's wear industry: The growth rate of revenue in the second quarter was basically stable, and the listed companies were stronger in their resistance to pressure. The gross profit margin and net profit rate rose overall, while the overall expense ratio during the period went down. In the medium to long term, due to the increase in business activities of Chinese people, the growth rate of listed companies' men's apparel sales is relatively stable and they are defensive investment targets.

Home textile industry: The overall growth rate of revenue in the second quarter slowed down. In terms of regions, there are obvious advantages in the proportion of listed companies in their respective regions, and there are still many blank areas to be developed. At present, the home textile industry is still in the staking-up stage, with expansion-based expansion and supplemented by endogenous growth. In the next few years, it will continue the strategy of “enclosures,” and is currently in a small decline in the overall upward trend.

Women's wear industry: In the second quarter, the growth rate of Lanzi’s revenue has slowed down, but the extension of expansion continues. Both the company's gross profit margin and net profit rate showed an upward trend year-on-year, during which the expense ratio increased by 8.17 percentage points year-on-year, and inventory and accounts receivable turnover showed a slowing trend.

Casual apparel industry: After undergoing a relatively rapid growth in the previous period, the casual wear industry is in the channel of destocking. In the short term, the gross profit margin will remain at a certain level, or decline slightly. Domestic casual wear is facing the impact of foreign brand channel sinking, and it is necessary to strengthen fine management and increase efforts in brand promotion, shop display, and sales staff training.