Price Growth Is Faster Than Sales Growth. How Long Can An Enterprise Last?

"Changes in raw materials have affected production.

In September 25th, cotton prices hit a new high of nearly 10 years, breaking 20000 yuan / ton.

In September 27th, the Shanghai and Shenzhen two cities, Shandong Hailong (6.18, -0.06, -0.96%), Xinxiang chemical fiber (6.42,0.02,0.31%) and other chemical fiber plate stocks all red, it is said that because of the rise in cotton prices lead to viscose raw cotton linter rise in price, thereby promoting viscose prices.

Manufacturing enterprises are facing price rises while facing buyers.

Accordingly, the industry has diagnosed that whether the high cotton price pressure can withstand will see whether the end consumers are willing to digest.

Price growth is faster than sales growth.

"If the price of terminal products increases, the price of the whole industry will rise, not a certain one.

33.54,0.49,1.48%, Lining and other listed brands and footwear enterprises reported that the increase in prices did not affect sales performance. The median operating profit of the seven wolves was 169 million 330 thousand and 500 yuan, an increase of 40.68% over the same period last year. Net profit was 123 million 783 thousand and 400 yuan, an increase of 31.02% over the same period last year.

28.80,1.30,4.73% has also entered a period of growth after adjustment. In addition, home textile enterprises such as 73.94,0.94,1.29% have exceeded expectations, and their incomes and net profits have increased simultaneously.

The first quarter of Lining's brand product dealer order ended in 2011. The data released seem to confirm this statement: the company's large orders increased by 12% annually, of which the average retail price of shoes increased by more than 7%, the number of orders increased by more than 5%, the average retail price of clothing products rose by more than 11%, and the number of orders increased by about 1%.

According to the analysis of the securities dealers, the price increase of production cost will not benefit the enterprises. The sharp fluctuation of raw materials will only revive the newly revived textile industry.

At the same time, they generally believe that although they will pmit to the terminal, but have little impact on the terminal brand, the cost pressure will be mostly borne by the production enterprises, some of them will be paid by consumers, the brand enterprises will bear a small part, and the brand enterprises' ability to pfer prices is generally strong.

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Fighting for two or three tier cities to find price advantage

Another worry of brokers is: in brand shoes and clothing enterprises, the proportion of raw materials cost is relatively low, and the impact is small. But at present, a large number of foreign brand clothing is in China. If the domestic clothing brand only increases the price, but fails to follow up in the design and quality, consumers may not always pay for the price increase.

From the survey, we can see that the terminal brands of seven wolves, Lining, and American Apparel continue to avoid the fierce competition between the first tier cities and the international brands, and expand the consumer groups and ensure the sales volume through the channel sinking, expanding the two or three line cities and the Internet market.

Li Ning Co in 2009, with a record of 8 billion 387 million yuan, surpassed Adidas in second of China's sports brand sales, thanks to deep ploughing in two or three line cities in recent years.

The two or three line city is considered to be a "value depression" with consumption potential. From the macro policy perspective, the reform of the income distribution system is tilting to the middle and low income groups, the minimum wage standards of all provinces have begun to increase significantly, the consumption power of the consumer groups is rising, and the brand recognition of the two or three tier cities and the first tier cities is basically the same. Once the consumption capacity is available, the majority of terminal brands will benefit.

Another important reason leading to many terminal brands entering the two or three line and four tier cities is real estate.

Since 2009, the rise of real estate in the first tier cities has been phenomenal, leading to the increase in rents. Some economically developed two or three line cities have relatively reasonable housing prices and both consumption potential. The two or three tier cities are not the important objects of the state's real estate regulation for the time being.

For example, the seven wolves company adjusted the channel development strategy in the first half of the year, subsiding to the three line cities, encouraging new stores to choose small shops to enter in the initial stage, reducing the pressure of rent rising. In the first half of the year, the company's selling expense rate was only 14.15%, down 2.95 percentage points compared with the same period last year.

The real estate market also contributed to the high growth of the home textile industry. Fuyang (45.41, -0.17, -0.37%), Meng Jie, and Luo Lai three home textile listed companies perform well in the first half of the year, and the performance of the newspaper is steady growth.

In the first half of this year, Fu realized net profit of 47 million 786 thousand yuan, an increase of 41.77% compared with the same period last year, and a profit of 0.46 yuan per share. The net profit of Luo Lai home textile in the first half of this year was 76 million 795 thousand and 700 yuan, an increase of 58.96% over the previous year, and 0.55 yuan of earnings per share. In the first half of, 43.97,0.17,0.39% achieved a net profit of 28 million 357 thousand and 400 yuan, an increase of 32.75% over the previous year and 0.54 yuan per share.

Data show that the per capita consumption of household textiles in China accounts for less than l% of consumption expenditure, which is 7% of clothing consumption, while clothing consumption in developed countries is basically the same as household textile consumption expenditure. From the perspective of consumption structure, there is a huge market for home textiles in China.

Brokerages also generally believe that the property pactions of the 70 major cities in China are stable, and the price volume of some two or three tier cities is rising. China's continued urbanization process and consumption upgrading will provide strong support for the needs of home textile industry.