Cotton Is Expected To Rise In Cotton Textile Leading Enterprises Will Usher In Investment Opportunities

In October, new cotton entered the picking period, and international cotton futures prices rebounded sharply in recent years.

According to historical experience, the purchasing amount of cotton in leading enterprises varies from six months to a year and a half. If the cotton price is rising in the late period, the low cost advantage of cotton inventory will obviously increase the gross margin level of enterprises, and enlarge the profit elasticity of enterprises at the same time of the increase of orders.

In 2015, the cotton planting area decreased globally or boosted cotton prices.

According to the latest forecast data from the US Department of agriculture, the harvest area and output of cotton in China decreased by 19% and 16% compared with the same period last year. The harvest area and output of the United States decreased by 23% and 18% respectively from the same period last year. The supply side will continue to shrink in 2016. Under the assumption of constant yield per mu, the cotton output in the new year will continue to decrease significantly. The area and output will obviously decrease, and the quality cotton will be more scarce, and the price will be pushed up from the angle of supply and demand. In addition, it will stimulate the psychology of market speculation, that is, the role of funds.

The focus of domestic cotton supply and demand is concentrated on the stock of 10 million tons of central storage cotton. Taking into account the relatively low inventory quality of cotton stored earlier, it is expected that in 1-2 years, this contradiction will be significantly eased, and the factors that will inhibit the rise in cotton prices will weaken.

In addition, the relatively high historical purchasing cost of cotton stocks (19 thousand and 800 yuan / ton storage price), and other charges such as warehousing, logistics and pportation, are also relatively high. If the stored cotton is sold at current prices, the pressure to bear the difference is expected to be relatively large.

Domestic cotton in 2015

The recovery growth is mainly due to the narrowing of the domestic and foreign cotton prices.

In April 2014, the cotton policy was changed from storage to storage and storage to direct subsidy. The links in the industrial chain were consistent. The cotton price would be obviously downward. Careful order and digestion of inventory were basically the same consensus. With the difference between domestic and foreign cotton prices narrowed to a reasonable range (1500-2000 yuan / ton), the demand for replenishment of cotton textile industry is expected to drive the growth of order volume and gross margin, thus making good performance of leading cotton textile enterprises.

In addition, according to historical experience, cotton price fluctuation has obvious cyclical impact on domestic cotton supply and demand, and the stock size of enterprises. It is predicted that with the advent of the historic bottom of cotton prices, enterprises in the industry will have extra power to purchase raw materials and further increase their growth rate.

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In the medium to long term, the overall business environment of textile manufacturing is expected to improve.

The high cost factors that cause the textile manufacturing industry to run downward periodically since 2010 are expected to gradually reverse.

Since 2010, cotton textile enterprises are facing a rising high cost dilemma. With the beginning of natural growth of human cost, environmental costs and the decline of main raw material and cotton prices, textile manufacturing enterprises are expected to reverse their difficulties and enhance their international competitiveness in 2015.

And experienced early industry integration, small scale, relatively weak business strength of enterprises exit

The industry concentration is expected to improve as a whole, and the resources such as orders will be gathered to the leading enterprises, and the market share of the leading textile enterprises is expected to increase significantly.

In view of the fluctuations in gross margin of leading enterprises in cotton textile industry, the upward trend of cotton prices basically increased.

Cotton sowing area has obviously declined, cotton price will rise slightly, and it is expected to further boost the profitability of leading enterprises.

With the narrowing of cotton prices at home and abroad to a reasonable extent, cotton prices began to pick up in October, and cotton prices were in the window stage. Under the background of the contraction of global supply and low cotton prices, the probability of cotton price rising will increase with time.

The replenishment demand of cotton textile industry is expected to drive the growth of order volume and gross margin, which is favorable.

The performance of leading enterprises.

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