Domestic Market Of Textile Market Is Expected To Grow By 3.3% In 2009.

Sensitivity analysis of textile and clothing consumption in major export areas is expected to increase 6.9% and 1.6% in 2008 and 2009 respectively.

Judging from the decline of the domestic market, the brand clothing enterprises choose defensive brands as the keynote, and choose to run a steady brand clothing company to share the next round of prosperity, such as the American state dress, the wedding bird, the seven wolves and the Weixing share.

In the 1-3 quarter of 2008, the per capita disposable income of urban residents increased by 14.68% compared with the same period last year, while the rural per capita cash income increased by 19.57% compared with the same period last year. The growth rate dropped by 2.56 points and 4.15 points respectively.

In the 1-3 quarter of 2008, the per capita clothing consumption of urban residents in China increased by 839 yuan, an increase of 10.58% over the same period last year, and the growth rate dropped 5.27 points over the same period. In the 1-3 quarter, the per capita clothing consumption of rural residents increased by 150 yuan, up 9.64% over the same period last year, and the growth rate dropped by 7.28 points over the same period.

The sales volume of large shopping malls in China increased by 11.03% in the 1-8 months of 2008 compared with the same period last year, and the retail sales grew by 20.81% over the same period last year.

In 2008 1-10, textile and apparel exports totaled 153 billion 700 million US dollars, an increase of 8.6% over the same period last year, and the growth rate dropped by 11.5 points compared with the same period last year.

In 2008 1-9, China exported 15 US dollars to the European Union, 25 billion 900 million US dollars, an increase of 33.6% over the same period last year, and exported US $18 billion 100 million, down 0.72% compared to the same period last year. It exported US $14 billion 600 million, an increase of 6.41% over the same period last year. The EU 15 countries, the United States and Japan accounted for 19.54%, 13.66% and 13.66% of the total exports respectively.

According to the International Monetary Fund's forecast in November 2008, we analyzed the sensitivity of the US and EU's import and export of textile and apparel from the global economy to the corresponding macro-economic sensitivity in the past 1990-2007 years. We expect that in 2009, the total volume of imports and exports of textiles and clothing from the United States will decline by 5.1% over the same period last year, and the EU will decline 1.2% compared with the same period last year.

Our forecast assumes that the RMB exchange rate has maintained a narrow fluctuation against the US dollar in 2009. At the same time, we have cautiously optimistic about the US's policy of canceling the quota of textile and clothing in 2009, assuming that it will not introduce any rigid quantitative control. The comprehensive supporting advantages of the industry will ensure that the market share of domestic enterprises will be further raised by about 3 points.

The expected implementation and possible policy support measures for 2009 will include RMB depreciation, loan interest rate reduction and local preferential tax incentives to promote employment to enterprises in the industry.

Industry 2008 3 quarterly report data show that the industry overall first 3 quarters of the overall revenue growth of 6.3%, the parent company net profit fell 2.3%, the growth rate is lower than the overall A share market, and the overall income and net profit growth of the industry is 6.1 points and 5.2 points lower than the 2008.

The increase in the proportion of domestic Brand Company has benefited from the high growth of domestic clothing consumption in the first half of the year. The overall cash flow of the industry is obviously better than the total A shares. The net cash flow of operating cash in the first 3 quarters increased by 64% over the same period last year.