Galaxy Securities: The Textile Industry Has Hit Bottom.

The plate reviewed last week. Individual stocks, the three leading companies were black peony, home textiles and Lukang technology, and the top three companies were Pathfinder, Sihai and Weixing. Hong Kong stock market led Tianhong textile , 360 degrees, six Fu International, led to Mu Shi international, Anta sports, Li Feng.

Important announcement and dynamic tracking of the company. Pathfinder The acquisition of the green field network to create an outdoor travel integrated service platform, in 2014, the autumn and winter futures orders amounted to 1 billion 315 million, an increase of 25% compared with the 2013 actual implementation amount; YOUNGOR - the major issues began to stop trading since January 14th; and the shares of China shares will not exceed 20 million 530 thousand new shares; the 31st degree - a significant decline in performance forecast; the controlling shareholder of Lu Tai A-- has increased the company's 11 million 300 thousand shares.

Industry important data. Raw material (1) 328 level spot week average price 19407 yuan / ton (-0.52%); Cotlook A:90 cents / pound (+1.49%); average difference between inside and outside cotton price difference is 3512 yuan / ton (-6.74%); long staple cotton (137 level) 34800 yuan / ton (-0.29%). (2) chemical fiber: polyester short 9769 yuan / ton (-0.64%); spandex 40D49340 yuan / ton (-0.32%). (3) cowhide: 103 cents / pound (0%). (4) gold: upper gold Au100g 245.04 yuan /g (+0.66%), London spot 1244.25 dollars / ounce (+0.89%). (5) cashmere: 1025.7 yuan /KG (+0.97%). Industry data: in December, the number of retail sales increased by 8.3%, clothing increased by 4%, gold and silver increased by 13%, cosmetics increased by 4.4%.

Keep the industry cautious. Last week, there was a series of noteworthy phenomena in the industry. First, Weixing group, the largest shareholder of Weixing group, increased its holdings of 1 million 580 thousand shares in January 7th, 10 days on -1, and its holding price was close to 10 yuan; two, the largest shareholder of Lu Tai increased 11 million 300 thousand shares from 113 million to 113 million in January 17th to December 12th; three was due to heavy matters suspension by YOUNGOR, and four was the acquisition of Greenfield by Pathfinder.

For the first two companies, they are all large shareholders who are fully recognized and strategically engaged in the medium and long term value. Among them, we estimate that Weixing shares should be PE13-14 times as high as that of 2013, and that of Lu Tai A is about 2013PE9.5 times, and the dividend return rate is estimated to be over 5%. Besides, we can also find companies with large market capitalization close to net assets, 1.1 times PB of wolves, 1.2 times of reported birds, 1.1 times PB of YOUNGOR (8% of estimated dividends), 1.1 times PB of blong East and 1.16 times of PB of Huafu color spinning. Based on this, we believe that whether production enterprises or clothing brands have bottomed out, this is also the reason for the prudent recommendation of the industry in 2014.

about Apparel enterprises From the short-term fundamentals, whether it is terminal retail, 2013 report growth, 2014Q1 and expected growth rate, or even the 2014 autumn and winter order growth (we expect the rate to remain negative), the industry lacks catalyst for the short term. From the perspective of exploring the green field, we believe that it is the beginning of the platform development of apparel enterprises. On the one hand, it will consolidate the leading position of the Pathfinder industry, and at the same time, open up the growth imagination of the company. In the non-listed company, the ten month old mom is the same, that is rooted in the consumer extension products category. In short term fashion companies, we continue to recommend Pathfinder.

The recommended targets in 2014 include YOUNGOR, Semir clothing, wedding bird, and Lai Lai home textiles (see annual investment strategy). Except YOUNGOR, there are short of catalysts in the short term. For production enterprises, we continue to strongly recommend Lu Tai A, especially large shareholder holdings will bring some benefits to short-term stock prices; Huafu color spinning and Baron East can be concerned, but due to the uncertainty of the fine cotton country's dumping price, the investment time still needs to wait.