Textile and garment industry research weekly: spring is coming.

　　Low-valued growth: Taipingbi/Jiansheng Group/Golis/Anzheng Fashion/Huafu Fashion; High-growth portfolio: Kairun Shares; Focus: Antarctic E-commerce, Soyut; Home Textile Recovery portfolio: Lorray Life, Fuanna, Focus: Mercury Home Textiles.

　　After 17 years of closing, the textile and apparel industry as a whole fell 23.85% a year, ranking first in the market, with valuations falling to a new low since the end of 2014. However, as consumer demand continues to warm up and the industry inventory, channels continue to adjust in place, textile and apparel such as high-end women's wear, home textile and other sub-sectors have recovered, the basic margin of improvement is obvious, plate valuation is gradually reasonable, we believe that the allocation opportunity is coming, the textile and clothing industry in the spring of 2018.

　　1, industry recovery is obvious, valuation gradually reasonable, the textile and clothing sector ushered in the opportunity to configure.

　　Industry recovery: the overall recovery of the consumer industry, in recent years, brand clothing channel adjustment brought about by the performance of the painful period has been marginal improvement. Clothing sales in November exceeded 9.6% (+4.5pct). Textile and apparel exports performed well in November: textile and yarn categories still exceeded expectations by nearly 11% on the basis of a high base in November 16, reflecting a sustained upward trend in the manufacturing sector.

　　The valuation is reasonable and the layout is oversold. We have combed 18 years under 20 times the valuation, 18-19 years forecast net profit CAGR more than 20% of the low-valued growth companies (Jiansheng Group, Taipingbi, Soyut, Anzheng Fashion, Collis, Huafu Fashion), and 18-19 years forecast net profit CAGR more than 40% of the high-growth companies (Antarctic Electronics, Kairun shares), built from two main lines Investors should focus on the quality standard.

　　2. Continue to lay out 17Q4 performance may exceed expectations of the company, focusing on recommending Taipingbi: before the annual report season, investors are advised to lay out ahead of schedule fourth-quarter performance may exceed expectations, or to usher in performance inflection point of the company, focusing on the recommendation of deep ploughing fashion clothing industry for many years, multi-brand and multi-channel operation outstanding, enhance the marginal competitive advantage, the future Performance is coming to the turning point of the brand clothing enterprise Taiping bird.

　　3, home textile industry recovery leader benefit, new recommended life, Fu Anna.

　　After four years of adjustment, the industry recovery trend in 2017 has been established. We believe that the main reasons for this recovery and sustained are the overall recovery of consumer demand and the high growth of e-commerce channels.

　　Second and third-tier cities to upgrade consumption and channel expansion, coupled with rising costs of small brands out of the market, home textile faucet benefit concentration, recommend Rolley Life, Fuanna, focus on: Mercury home textiles.

　　4, the key points to recommend the company.

　　Kairun Shares: B2B, B2C is expected to double supermarket market expectations, we judge the rapid growth of the company's performance has been verified. 1) B2B business: in 2017, it added new customers such as famous brand products and NetEase, which is expected to be CAGR20%+ for three years. 2) B2C business: more sophisticated management, Runmi launched a new brand "Youqi" to "deep buyer" way, positioning pan-travel products; "90 points" positioning strong travel products to maintain brand characteristics. New category + new channel + new marketing helps the company go further to "China travel first brand". The second millet ecological chain company Shuomi brand "Kindergarten" on-line, positioning the children's travel market, is expected to become the second Runmi. 3) EPS is expected to be 1.01/1.51/2.18 yuan in 17-19 years, CAGR nearly 50% in the next three years, the target price is 75.5 yuan, corresponding to about 50 times PE in 2018.

　　Taiping bird: 1) the market is expected to be low. We believe that 2017Q4 performance exceeds market expectations and upward trend of performance. 2 the three year adjustment period (channel, design adjustment) has passed, and growth dividends will be enjoyed in the next few years. In the channel, shopping malls + e-commerce account for more than 50% of the new channel; in the design, re-attracted young consumers after 90, while the main competitors are still adjusting, expected in the next few years to enhance the competitive advantage, the market share will also increase. 3) The EPS forecast for 2017-2019 is 0.96/1.38/1.79 yuan, and net profit is expected to grow at a compound rate of 37% over the next two years, with a target price of 34.50 yuan at a 25-fold valuation in 2018.