High Margin Of Retail Safety: 2011: Textile Stocks Are Still Vulnerable.

Since the beginning of the new year,

In the A share market, stocks with margin of safety have two characteristics: one is the certainty of performance growth; two, the valuation is still at a low level.

After adjustment, the value of the retail market is high.

After adjustment in the fourth quarter of last year, the valuation of seven wolves, fuanna, Weixing and good bird in the textile and garment retail sector decreased.

Seven wolves fell by about 20.7%, Weixing shares fell by about 24%, and fuanna dropped about 24.4%, home textiles declined by about 15%, Meng Jie home textiles fell by about 19.4%, and the news birds fell by 16.4%, about 20%, the largest adjustment since the end of 2008.

The full adjustment of the price of these textile and garment retail enterprises has a high margin of safety for their valuation.

Many agencies believe that for these excellent brand retail enterprises, only in the adjustment can get a good opportunity to buy.

Graham, the authority figure of the modern securities, is known as "the margin of safety is the degree of underestimation of value and price. When the share price is lower than the intrinsic value, there is a margin of safety, and only when the value is underestimated is it at the margin of safety".

Zhang Bin, an analyst of the national textile and apparel industry, believes that the overall adjustment of the recent textile and garment retail sector is related to the fact that the current retail industry is hard to predict and the valuation is high.

After adjustment, the dynamic P / E ratio of many stocks dropped to a certain extent in 2011. Considering the steady and high growth of the future performance of the enterprises, the margin of safety has obviously improved and has obvious investment value.

"In the first half of this year, from the perspective of the development of the consumer market, there are two factors that stimulate the rise of the share price of the textile and garment retail enterprises. One is the over expected and possible high delivery of the annual report of the company, the other is a quarterly earnings growth or exceeding expectations.

From the perspective of capital market, the recent adjustment has brought us a rare chance to intervene in high-quality textile and garment retail enterprises.

Zhang Bin said.

9 annual growth of listed textile enterprises, cotton textile products increased fastest

As of January 18th, a total of 37 stocks in the textile and garment sector were released in 2010, of which 33 companies reported good results, accounting for 89.19%.

This proportion far exceeds the overall reporting level of A shares in the same period.

Wind information data show that as of now, a total of 894 listed companies have disclosed annual reports, and 727 of them have reported good results, accounting for 81.13%.

Obviously, the annual performance of textile and apparel listed companies in 2010 is higher than the overall A shares.

Of the 33 companies that reported good news, the annual net profit increased by more than 50% over the same period of the year. There were 12 companies, and 17 companies were expected to increase by less than 50%, while 3 had continued to win and 1 to turn around.

In the pre worry camp, the first deficit was 1, with a pre reduction of 4.

In addition, 1 companies' annual reports are still uncertain.

From the subdivision industry, Shen Wan cotton textile company's performance increased most obviously, with 6 companies increasing by more than 100%.

Phoenix Bamboo textile expects net profit in 2010 to be around 97 million yuan, and net profit will increase by 420% compared to the same period last year.

According to the company announcement, the growth of performance comes from two aspects. First, the company strengthens management, strengthens the overseas market development, and actively promotes the fabric brand construction; and the two is 2010 yuan's total revenue realized by futures trading is 43 million 770 thousand yuan.

Huamao shares followed closely. The net profit of the annual report is expected to be about 353 million 550 thousand yuan, and net profit will increase by 350%~400% compared to the same period last year.

In explaining the cause of the performance change, the company indicated that as the textile market situation improved, product prices rose and gross profit rates increased, the main business profits rebounded sharply. In order to implement the regulatory policy requirements of the CSRC "Shen Yi Yi Yi", the company sold 18 million 300 thousand shares of Hongyuan securities held by the Shenzhen securities exchange concentrated auction system, which significantly increased the investment income of 2010. During the reporting period, there were more government subsidies, such as subsidies for the relocation of new cotton, subsidies for import equipment, subsidies for energy saving projects and so on.

The other 4 cotton textile companies are Hongda hi tech, Huafu color spinning, Vico essence and Xinye textile.

Among them, Hongda high tech expects annual net profit of 41 million 600 thousand yuan ~4500 million yuan, is expected to increase by 270%~300%; Huafu color spinning annual report net profit of about 340 million yuan ~35000 million yuan, is expected to grow 80%~100%; Vico essence increased by 150%~250%; Xinye textile increased by 180%~200%.

Performance growth + low valuation 5 stocks can be assured of holding

According to the latest statistics of CAI Hui, 5 of the 29 textile and apparel companies whose annual report performance has been determined to grow, are less than 35 times the dynamic price earnings ratio as of January 18th, and in the next 12 months, the forecast P / E ratio is lower than 30 times, and the relative margin of safety is relatively high.

Shenda shares

The performance forecast announced in January 8th indicated that the net profit of the company was expected to grow by more than 50% over the same period last year. The growth of main business and the improvement of the profit level were the main driving force for the growth of its performance. It was also the most reliable driving force for the sustained growth of the company's performance in 2010.

As of January 18th closing, the stock price was 6.72 yuan, the latest dynamic earnings ratio of 16.40 times, in the performance of the textile and apparel stocks in the lowest valuation.

It is worth noting that at present, no broker recommends the stock, but with the steady growth of performance and less attractive value, the main funds will soon be stationed.

Weixing stock

The scale of production and sale has a certain increase compared with the same period last year. Net profit in 2010 is expected to increase by 30~50% over the same period last year.

According to the analysis of national gold securities, the company has a perfect combination of sales, R & D and production, the highest level of internal management and management and the leading sales ability, with a certain bargaining power and low growth risk. At present, the valuation is lower than 20 times in 2011, and the margin of safety is higher.

If the rights issue is implemented, the allotment price is less than 8 yuan, and it is strongly recommended to participate.

Huafu color spinning

As of January 18th, the unit had a dynamic P / E ratio of 25.42 times, with a forecast earnings ratio of 16.78 times in the next 12 months.

The latest research report of Everbright Securities believes that Huafu color spinning has obvious advantages in the crack market and is optimistic about the long-term development of the company.

Wedding bird

The ability of endogenous growth is strong, and many brands are successfully operated. In the future, as the growth of stores increases, the main business of the company will gradually turn to comprehensive brand clothing, and the potential for long-term growth will be great.

Dream home textiles

Compared with the other two home textile listed companies, the company has a low base from sales revenue, net profit and number of stores. The low base means that the extension space is large, and the rapid expansion of sales network will drive the growth of performance and increase the market share.

The company expects an annual increase of 30%.