Textile And Apparel Industry Weekly: May North Capital Plus Textile Service Plate

In May, the net outflow of north capital was 53 billion 700 million yuan.

As of March 2019, except for February 2018 and October, the capital in North was net inflow, and in April 2019, there was a net outflow of capital in the north.

In May 2019, the net outflow of north capital was 53 billion 674 million yuan, the highest monthly net outflow of funds in the north since 2018.

The share of the northbound capital of the spinning and weaving board increased by 300 million yuan.

From 2 to May 2018, the shareholding amount of the northbound capital of the spinning and weaving board continued to increase, followed by the increase or decrease of the shareholding.

In May 2019, the shareholding increased from 265 million yuan to 2 billion 36 million yuan, and the number of shareholding increased by 35 million to 239 million shares. The increase in capital holdings in North China was mainly due to net capital inflow and increased shareholding.

Referring to Haitong strategy, the difference of investment behavior between A shares and foreign capital organizations, foreign preference value stocks tend to choose leading stocks.

In May 2019, in the background of the capital outflow of A shares in the north, the northbound capital flows into the spinning and weaving service sector, and we suggest that we should pay close attention to the investment opportunities of the sector.

North capital has 27 spinning and weaving stocks.

As of May 2019, the north capital held 27 spinning and weaving stocks, the top 5 of them were Lu Tai A (3.47%), seven wolf (2.58%), Hai Lan home (1.54%), Be Meleven (1.53%), Semir dress (1.52%); in 2019 alone, May, the top 5 positions in the north were +0.63pct, +0.41pct, Semir dress, +0.40pct and +0.22pct.

Northbound capital owned by the textile and apparel stocks are dominated by industry leading and undervalued and high score red targets.

There are two categories of investment targets in North China:

(1) leading industry segments, including Hai Lan's home, Be Meleven and Semir costumes.

(2) undervalued and high score red stocks include nine herd kings, fuanna, Taiping bird, Weixing share, Lu Tai A, Huafu fashion, and Su Su fashion.

Valuation: the PE value of textile and garment sector is 18.61 times (TTM, excluding negative value, the same below). In the north capital holding stocks, 18 PE valuations are lower than the plate level, accounting for more than half.

Low PE valuation of the top ten spinning stocks, northbound funds hold Black Peony (10.00x), Lu Tai A (10.32x), vuri shares (10.33x), civil aviation shares (10.45x), Hai Lan home (11.06x), and fuanna (12.32x); with PB valuation as the standard, north capital has seven wolves (0.83x), China Group (0.90x), and Baron East (0.91x); low valuation of the top ten spinning stocks, north capital has La Natsu Bell (HV), search for special (H), China Group (H), Huafu fashion (HEX), Mei Bang dress (HEX).

Bonus: capital shares held by north capital account for nearly 90% of the shares.

In the first ten spears of the dividend payout rate, the north capital is held in search of (167.43%), broad-minded Technology (161.91%), and nine Mu Wang (107.69%); in the first ten spinning stocks, the north capital has 9 shares, including broad-minded Technology (8.25%), nine Mu Wang (6.93%), fuanna (6.73%), Taiping bird (6.15%), search special (5.92%), Weixing share (5.92%), Rutai A (5.92%), Huafu fashion, and Hai Lan's home.

Investment advice.

In the light of fundamental considerations, we suggest that we should pay attention to: first, grasp the subdivision leader, maintain the Semir clothing and Lefin of high growth; second, improve the performance of the public leisure faucets; gradually improve the performance of Hai Lan's family; third, underestimate the value and grow steadily.

Next week's combination (20190603-20190609): Jiansheng group (weight 25%), Hai Lan's home (weight 25%), an Zheng fashion (weight 25%), Be Meleven (weight 25%).

Risk warning.

Terminal demand declined, retail environment deteriorated, residents' income level declined, and industry competition intensified.