After a few years of low tide, the textile and apparel industry is expected to recover this year. In particular, the launch of the Internet + strategy will become the home of industry transformation and upgrading and cross-border mergers and acquisitions, which will strongly promote the development of the industry.

Textile and apparel companies rush to connect to the Internet +

The textile and apparel listed companies, which have been in the midst of a dearth of value, have now begun to take the initiative to “counterattack” in the face of the bull market. The pace of mergers and acquisitions has shown signs of acceleration.

Recently, a number of major listed companies in the textile and clothing industry announced major events, and an endless number of transformation events and expectations have become a "booster" for the stock price soaring. According to statistics, in the recent three months, the monthly rise of textile and clothing segment exceeded 20%, and the overall outperformed the broader market. The rolling P/E ratio of the sector reached 50 times. Because of the small market value and the lack of explosive growth in the main industry, listed companies in the textile and clothing industry have historically been high-risk areas for mergers and acquisitions. Unlike the simple backdoors of previous years, this year's transformation of related companies has mostly centered on the "Internet Plus" and cross-border mergers and acquisitions.

A number of brokerage analysts pointed out that after several years of destocking, the performance of textile and garment companies is expected to bottom out this year, but the industry fundamentals have not yet fully recovered. However, under the bull market background, the transformation and upgrading of leading companies in the industry and cross-border mergers and acquisitions will be the main theme to promote the rise of the sector, in which Internet + will be the theme throughout the year.

Industry growth logic change

The apparel industry is facing the situation of “under the line” and “hot online”, and the fundamentals are still unsatisfactory. A quarterly report shows that despite the year-on-year increase in revenue and net profit, the growth rate has decreased compared to the same period of last year, and the performance of key companies in the industry has been slightly lower than expected. In addition, although the export orders in the first quarter have improved compared to the fourth quarter of last year, the overall situation remains poor.

In April, the retail sales of apparel products increased by 1.4% year-on-year, a slight increase of 0.1% over the same period of last year. The growth rate in March was significantly higher than that in March, which was 5.7 percentage points higher. Analysts pointed out that although the data has improved in April, the demand for the domestic apparel terminal market has not been fully restored due to the slowdown in economic growth and the fact that the consumer environment has not fully recovered. In addition, online consumption has developed rapidly, and consumer demand for offline stores has decreased. With the high purchase price of shops, the weakening of terminal demand and the continuing high operating costs, the impact of the rapid development of online e-commerce on the traditional business model of the apparel industry will continue.

Clothing is already the first category in China's online shopping market, accounting for 21.5%. According to statistics, in 2014, the online transaction scale of apparel commodities reached 615.3 billion yuan, a year-on-year increase of 40%, and the online online penetration rate reached 23.6%. Some professionals pointed out that clothing products have features such as non-standardization and experience consumption. The integration of online and offline products will be the development direction of the apparel industry. In contrast, with the combination of brand advantages and offline channels, brand clothing companies are expected to benefit first and the growth rate will accelerate.

In the face of the industry reshuffle, A-share listed companies have access to “Internet+” through various means. There are brokerage analysts, the current A-share listed apparel companies accounted for more than 70% of private enterprises, enterprises are mainly located in Jiangsu, Zhejiang and Shanghai regions, the company's executives are strong on market value management and transformation and upgrading. The analyst pointed out that relatively abundant cash flow and lower industry average market value are the basis for mergers and acquisitions and valuation restoration in the textile and apparel industry. Leading companies are constantly expanding their horizontal and vertical industrial chains through mergers and acquisitions, and are expected to become pioneers in transformation and upgrading.

Huatai Securities Research Report believes that an Internet ** is profoundly affecting the traditional clothing industry. Industrial efficiency has accelerated and the leading companies have accelerated by the Internet. The value of growth has been reconstructed, and a new round of value dugouts has begun.

Seven modes to access "Internet+"

The China Securities Journal reporter combed this year's case to find that the pattern of clothing companies accessing the Internet + is relatively diverse, including Internet finance, mergers and acquisitions of e-commerce platforms, acquisition of e-commerce clothing brands, sports industry, smart home, online customization, and mobile internet and social networking. Main direction.

Internet finance is undoubtedly the most fashionable "Internet +" theme. Take the P2P industry as an example. According to incomplete statistics, there are currently more than 60 listed companies that have participated in the P2P online loan industry through self-building, equity, and acquisition. China Securities Journal reporter combed found that clothing listed companies currently have Announcement Announcement, Jiaxin Silk, Septwolves and other announcements through participation in the Internet finance and supply chain finance business.

The Annunciation announced on May 12 that the company’s wholly-owned subsidiary, Baoxin Bird Ventures, and the company’s vice chairman and general manager Zhou Xinzhong invested a total of RMB 55 million in joint ventures with a number of internet finance companies to establish small fish gold suits. 10% equity. Xiaoyu Jinfu currently operates the P2P platform Wenzhou Loan and Pocket Banking. In the future, Xiaoyu Jinfu will form a set of Wenzhou Loan, Pocket Banking, Crowdfunding Services, Internet Credit Collection, Big Data Service Provider, and third-party payment. closed loop. Before this share of Xiaoyu Jinfu, the Annunciation has already begun to set foot in the Internet finance sector by investing in Renren instalment and Yongjia Hengsheng Village Bank. At the recent exchange with investors, Announcement Chairman Wu Zhize stated that the company will cooperate with more Internet finance companies in the future and strive to make internet finance the second main business.

The financial layout of Jiaxin Silk is mainly around the main business. Company executives said that the company will focus on supply chain finance, increase investment, combine traditional production with the Internet, capital, usher in a greater space for development. The performance forecast shows that supply chain finance has become an important part of Jiaxin Silk's profit growth.

As for the e-commerce platform, Baiyuan Pants, Semima and other companies have already announced their participation in cross-border e-commerce platforms. In May of this year, Semir Apparel subscribed 4.51 million new issued shares of Korean e-commerce ISE, totaling approximately RMB 115 million, and the two parties may cooperate on Internet platforms. ISE is a leader in the provision of e-commerce services in Korea. In July 2014, Baiyuan Pants acquired 100% of Haimei E-Commerce Global E-Commerce for $1 billion. In the first quarter of this year, Baipao realized a revenue of 576 million yuan, a year-on-year increase of 586.26%, of which 85% of apparel revenue came from Global E-commerce. In order to reflect the full expansion of the company's business into the Internet+ field, the announcement in May of the Hundred Pants Company stated that it would be renamed “Cross-border Tongbao”.

Search Yu special directly choose to buy mature clothing brand. At present, the company has successively invested in several e-commerce clothing brands and deployed different market segments. In March 2015, Soutra acquired 25.2% of Huimei Group and became its largest shareholder (the Huimei Group mainly operates the e-commerce brand Inman and the first language). Previously, the company has successively acquired women's e-commerce brands such as Muzi Garments, Gezhi Apparel, Fiber Scout Apparel and Ouyier Apparel. The company also announced recently that it has increased its capital by RMB 10.8 million from over-raised funds to Guangzhou Meimei Trade Co., Ltd., which accounts for approximately 20% of the shares. According to statistics, Minmei Trading is a company that designs and sells large-size women's wear on the e-commerce platform. Its brand “Cili Xiuxi” is one of the leading brands of Chinese large-size women's wear.

The fourth category is the integration of industrial chains around the user base to enter the incremental market. The Pathfinder (40.35 suspension, consultation) has successively acquired Greenfield and the online travel B2B platform to easily navigate the world, choosing to expand the upstream and downstream industry chain around existing users.

The fifth category is the smart home transformation of home textile companies. Recently, Luolai Home Textiles and Taiyin signed a strategic cooperation agreement to jointly develop products, collaborate in exploring domestic and foreign markets, and serve end customers through the smart home Internet platform.

With the continuous upgrading of men's clothing consumption, the Menswear listed companies such as Baoxi Bird, Jiumuwang, Youngor and Luthai have recently launched men's clothing custom business, mainly providing men's suits and shirts. Among them, the C2B mass customization business of the Annunciation is currently unique in the country. Customers can place orders online, and body service is available. The cost is relatively high, but the business model has no inventory pressure and the profit is relatively high. The company's current offline private subscription business has already accounted for 10% of retail sales.

There are also a number of apparel companies that have actively entered the mobile Internet community to create an Internet ecosystem. Such as the search in the special shares of micro-store network, Walss shares to buy 30% stake in Youshe Technology into the e-commerce 3.0 area, Smithsdale, Meibang clothing on-line "with Fan" APP.

Significant improvement in performance still takes time

Due to frequent industrial restructuring incidents, the agency has increased the research and layout of textile and apparel stocks. In the first quarter, the Haishu House was newly established by six institutions, and the combined stock of the Bank of Communications increased by 13.99 million shares; Youngor received a new portfolio of 17.6 million shares.

River Securities proposes to pay attention to three types of textile and apparel stocks: First, there are excellent companies with transformation expectations and prospects. Such companies have comparative advantages in terms of strategy, management, performance, and funds, and the benefits are relatively large. The main targets include Jiumu Wang, Aokang International, Septwolves, Pathfinder, Luolai Home Textiles, Fu Anna, etc.; Second, Longitudinal, Walters, Messina, Rodeo, HTC, and other small-cap companies, the flexibility of these companies This is relatively impressive; the third is the leading company that is still in the valuation zone and can focus on Youngor, Haishu Home and Aokang International.

There are brokerage analysts pointed out that some of the listed companies in the textile and apparel listed companies have clearly defined the short-term landing capital market plan, once successful, will bring a certain amount of investment income for the company, such companies are also worthy of attention. The Annunciation Bulletin Announced that Xiao Yu Jin Fu will launch the next round of **Introducing the Wind Investment Book within the next two years and will implement the listing as soon as possible (including but not limited to New Third Board, Domestic A Shares or Overseas Listing). At present, Xintuo Venture Capital and Zhou Xinzhong hold a total of 12.5% ​​of the shares of Xiaoyu Jinfu. If Xiaoyu Jinfu has access to the capital market, the company may receive investment income. Sou Yu special announcement also shows that the company's strategic investment Huimei apparel (also known as Inman) plans to submit the A-share listing application to the China Securities Regulatory Commission within this year. If Huimei apparel is successfully listed, the company will be expected to become a member of the IPO shadow stock. . China Merchants Hanhai, which has recently acquired shares in Soult Special, is also scheduled to be listed on the New Third Board in 2015. If it is successfully listed, the company will get a better return.

However, some analysts have pointed out that even though listed companies in the textile and clothing industry are frequently involved in transformational actions and bring about rising stock prices, there are few cases in which the relevant merger and acquisition transformation can increase the company's performance in the short term, and the substantial improvement of the performance of most companies still needs time.