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High Cotton Prices Led To A Sharp Fall In Textile And Apparel Stocks By &Nbsp;

2010/10/14 17:56:00 49

cotton

The high price has led investors to worry about the rising cost pressure of textile and garment enterprises. The related stocks have fallen sharply in the past 5 trading days, but correspondingly, the shares of related chemical fiber stocks have risen sharply.

Analysts pointed out that, on the one hand, cotton prices will remain at a high level and cost pressures will always exist; on the other hand, the higher valuation of these companies also makes the stock price continue to bear the pressure of callback.

In the past five trading days, the 002327.SZ share price of home textile enterprises has fallen by 12.08%, 002293.SZ has fallen 12.76%, brand clothing maker 002269.SZ has dropped 1.74% and 002029.SZ has dropped 5.49%.

In the same period, the Shanghai and Shenzhen 300 index rose 12.59%.

However, Lin Guofang, chairman of Fuan Anna, pointed out to reporters that the increase in cotton prices did increase the cost of the company, but because of its brand awareness, some cost pressures could be shifted by adjusting the terminal selling price.

Xiangcai securities

Wu Xiaoyu, an analyst of textile and apparel industry, said that the cost pressure of textile and garment enterprises can not be pferred by 100% outsourcing production links. At present, the price increase of domestic textile enterprises is about 10-15%, less than the increase of cotton prices; however, the cost of home textile enterprises depends largely on the price of embryo cloth, while the latter increases by a little lower than that of cotton.

Whether the price of cotton or grey cloth will increase, the profit growth rate of home textile enterprises will slow down this year.

He believes that the recent fall in home textile stocks is also related to overvaluation, so the future trend of the sector will continue to be weak.

Brand apparel shares

The price is now at the upper limit of reasonable valuation, and its share price is under pressure.

On the other hand, the strong price of cotton stimulates the price of chemical fiber enterprises to rise.

Huaxi Village (000936.SZ) shares hit a record high of 8.85 yuan today, up 1.41%.

Guoxin Securities pointed out that the continuous rise of cotton prices will stimulate the demand for PET staple fiber, promote the price of PET staple fiber, and enhance the profitability of Huaxi Village polyester staple fiber business.

Another beneficiary, 002127.SZ, today closed at 11.53 yuan, a record high.

Lu Ruifen, Secretary of the board of directors of the company, said that the demand for products is increasing, and the price of polyester filament is also related to the rise in cotton prices.

Due to the bottleneck of the production scale of polyester filament industry and the wide demand for downstream, it is expected that the hot market of polyester filament will probably continue until the second half of next year.

Today's closing, Zhengzhou futures futures exchange cotton futures contract in May rose 0.08% to 23600 yuan / ton.

Since the end of July, the contract has increased by more than 40%. On Monday, the contract rose to a record high of 24280 yuan / ton.