Textile Prices Doubled, Tianhong Textile "Curve Saving The Nation"

< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > textile industry < /a > has not been seen for years, and is often accompanied by words such as "sunset" and "depression". However, since September 2012, Hongkong's textile stocks have launched a huge unilateral rally. 02678.HK is more than 5 times more than Hongkong's capital market. 02313.HK and 01382.HK are doubling in one year. < /p >
< p > < strong > market anxiety textile industry < /strong > /p >
< p > < strong > Tianhong textile "curve save the nation" < /strong > < /p >
In the early stage of the market, P has been worried that the low cost advantages of Southeast Asian labor force will have a fatal impact on Chinese textile and garment enterprises. For example, China's processing fee, on average, is $10 per garment, Bangladesh is about $5, and British imports from Bangladesh can be exempt from tariffs. The main advantage of China is that the textile industry chain is well matched. Once the industrial chain of Southeast Asian countries is formed, the domestic enterprises will be more impacted. < /p >
< p > Tianhong textile was listed on the main board of Hongkong in December 2004, specializing in the production of cotton core yarn. It is the largest manufacturer of cotton core spun yarn in China. As soon as 2006, Tianhong textile decided to invest in the construction of textile factories in Vietnam. Now it has begun to take shape. The company now has 1 million spindles: Xuzhou and Nantong 600 thousand, Vietnam 400 thousand. In addition to the free import of cotton in the international market, the wage level of Vietnam is only about half that of China. In addition, in order to attract foreign investment, Vietnam stipulates that the income tax is exempt from the first 3 years from the first profit year, and the income tax in the next 7 years will be reduced by half, which is much better than the "two exemption and three reduction" rule in China. Since 2011, the price of cotton in China has increased by about 6000 yuan more than that in the international market. This makes the Tianhong textile factory built in Vietnam an enviable cost advantage. This advantage is directly reflected in the annual report of 2012, plus the low base effect in 2011. The net profit of Tianhong textile increased by 7 times to 486 million 300 thousand yuan in 2012, and the gross profit margin increased from 8.1% in 2011 to 15.3% last year. < /p >
< p > < strong > Shenzhou and inter Pacific Textile > /strong > /p >
< p > < strong > by valuation raise < /strong > /p >
The overseas expansion of < p > a href= "//www.sjfzxm.com/news/index_cj.asp" > Tianhong textile "/a" has been successful, and its share price has risen to HK $13.6 from 2.5 Hong Kong dollars in early September last year, the highest being to HK $16.3. Almost at the same time, other textile stocks in the Hongkong market also ushered in the spring. Shenzhou International is known for its foundry, UNIQLO, ADI, Nike and its stock price has risen by 110% since the end of August 2012. The price of mutual textiles also started a doubling of market prices at the end of November last year. < /p >
< p > through observation, it is found that the soaring price of Tianhong textile is dependent on the stimulation of profit growth, while Shenzhou International and Pacific Textile price rises are purely due to valuation expansion rather than profit drive. The net profit disclosed in the latest annual reports of the two companies is -4.0% and + 3.6% respectively. In other words, the stock price is entirely promoted by valuation. For example, Shenzhou International price earnings ratio has increased to 15.6 times from 8.3 at the end of August last year, and the exchange rate of textiles has expanded to 8.4 times from the end of November last year to 14.1 times the current price. < /p >
< p > {page_break} < /p >
< p > < strong > > big row report, strong stock price < /strong > < /p >
In August 14, 2012, Credit Suisse, in its comment on Tianhong textile's China Daily, held that its performance was better than expected in the market, and that Vietnam's project to be put into operation will increase its annual profit and raise its target price and rating. P In January 14th this year, Moodie, an international rating agency, upgraded the debt rating of Tianhong textile from "negative" to "stable". < /p >
In P, November 27, 2012, Citi pointed out in a report that the gross margin of the intermediate textiles of the Pacific textile industry fell far better than its expectations, showing the strong cost control capability of mutual textiles and giving it a "buy" rating. Subsequently, the price of mutual textiles began to rise. < /p >
< p > December 13, 2012, Credit Suisse issued a report that Shenzhou International business grew steadily, expanded capacity and maintained healthy cash flow, and raised its target price from 14.6 to HK $20.8. The share price rose 8.6% on the day of the report, followed by the main wave. < /p >
< p > analysis of the reasons for the rise of the a href= "//www.sjfzxm.com/news/index_c.asp" > Hongkong textile shares < /a > in the recent year. First, the pre market market is too worried about the impact of Southeast Asia, and the valuation given is relatively low, and the valuation repair space is larger. For example, Shenzhou International and Pacific textiles. Second, expand production capacity overseas to reduce costs and improve profitability. For example, the expansion of Tianhong textile in Vietnam. Third, industry downturn brings M & A opportunities and improves concentration. Finally, the report of big banks and rating agencies increased the market's concern for textile stocks. < /p >