Environmental Protection Strictly Drives the Printing and Dyeing Industry to Accelerate Integration

1. Maintain industry cautious recommendations. This week, Hangmin shares soared. We believe that water pollution incidents in Wujiang District are driving more stringent environmental protection, and the printing and dyeing industry consolidation has further accelerated. From the perspective of industry fundamentals, it is still dull and we still insist on pre-clothing. Home textiles have bottomed out, but when the catalyst is up, the catalyst is not clear. The breakthroughs sought by key companies in the industry are both the supply chain integration and the improvement of terminal retail capabilities. At present, the investment targets mainly come from two types: 1. At the end of inventory, there are rebounding targets after the adjustment is in place, such as China Lilang (product price/performance ratio, reporting benign, orders will increase in the single digits in the fall, and winter highs. Number growth), Announcement of good news (13 years of thorough inventory, rapid development of hazzys, 14-year performance flexibility). 2. Subdivided the industry’s relatively good growth targets and new model targets, debuting Semima apparel (being optimistic about the development of children's wear field, integration of casual wear supply chain, development of the company’s online business), and FIYTA’s own brand driving stable performance (growth), pathfinder (elimination of current price premiums, long-term integration and development of the industry, and the construction of an “outdoor travel comprehensive service platform”), Hailan home (continued channel expansion, increase in buyout model, split ratio change, 16 Years of new growth drivers need to be observed). In addition, the performance of the home textile sub-sector is relatively good in the sector. Fu Anna's major shareholders promised not to reduce their holdings. The Luolai Home Textiles executives continued to increase their holdings, indicating that the Industrial Capital believes that the current stock price is undervalued and that it has investment value in the medium and long-term perspective. In the cotton spinning industry, we recommend Luthai a. Although the price of domestic long-powder cotton declined rapidly, the company’s terminal receipt price remained at the previous level, and this mainly depends on the overseas long-padded cotton prices and relatively high-grade cotton prices kept at a relatively high level, instead domestic long-staple cotton. Cotton is currently in line with foreign countries to form a big advantage for the company; if the exchange rate is stable at the current level, the company's annual EPS1.2 problem is not large, and even not rule out the possibility of exceeding expectations. The current stock price of the company corresponds to pe7 times, and maintains the recommendation rating of the company.

2. The performance of the sector was reviewed last week. Last week, the Shanghai Composite Index rose noticeably, accumulating a gain of 3.28%; the spinning and weaving sector rose 1.06% overall, of which textile manufacturing rose 1.36% and apparel and home textiles rose 0.76%. Looking at the stocks, the sector led the top three companies in Baiyuan Pants (acquisition of Global E-Commerce), Taiya Securities (intended to be incorporated into Joymaker Century), and Hangmin Plc (Wujiang District, water pollution-driven dyeing and printing consolidation accelerated, which is positive for the industry leader) The top three companies that led the decline were Caesars shares, Sanfang Lane, and Demian shares (the net profit for the first half of the year was lowered by 2239%). Hong Kong stocks led the rise in Belle International, Daphne International, and China Taifeng Bedding; the leading three companies were Li Ning (profit warning), Shenzhou International, and Rainbow Textile.

3, the company's important announcements and dynamic tracking. Key research-Summa Apparel: acquisition of children's education brand, transformation of children's integrated service providers first step; Weiqiao Textile: Direct supplementation policy rules is not in place, the cotton spinning industry is in a wait-and-see state; Hangmin shares: Wujiang District, water pollution driven by accelerated integration of printing and dyeing, Good industry leader. Investor Relations Announcement - An Lifang: In 2014, q1 overall sales increased by 5%; Huafu Spunlaced: publicly issued corporate bonds were approved; Xingye Technology: provided guarantees for the subsidiary Xingning Paper Industry of 30,000 million; Samsonite: The acquisition of gregory was completed at 84.135 million U.S. dollars; Bosideng: 2013 revenue decreased by 11.7% year-on-year; ygmtrading: 2013 revenue decreased by 8.6% year-on-year.

4, the industry important data. Raw materials: (1) The average spot price of the 328 spot market is 17,190 yuan/ton (-0.32%); the colookka is: 83.09 cents/lb (-0.19%); the cotton price difference between inside and outside is 2420 yuan/ton (+0.57%) Long-staple cotton (grade 137): 29,500 yuan / ton (-0.34%); imported long-staple cotton (American pima2 grade): 30,917.6 yuan / ton (-0.32%); US dollar exchange rate: 6.1949 (-0.21%). (2) Chemical fiber: viscous short 11,818 yuan / ton (-0.1%); spandex 40d47, 640 yuan / ton (-0.42%). Cotton Yarn: 32 cotton carded yarns 24,276 yuan/ton (-0.17%). (3) Gold: Shanghai Gold Institute au100g260.92 yuan/g (-0.15%), London spot $1,305.95/oz (+0.08%).