Bright spots of mergers and acquisitions in the textile and apparel industry

Although the textile and apparel industry has a certain ability to resist cycles, as the growth rate has entered a new normal, the industry has always been a high-risk zone for capital operations around transformation and upgrading. It is expected that 2016 will still be a major year for industry mergers and acquisitions and transformation.

　　From the perspective of the transformation direction, the main idea of the transformation is to form an ecosystem around the extension of the industrial chain of the main business and cross-border dual-main business operations. In the first two types of capital operations, it is still a common way to put in more certain growth targets.

　　 The sports industry will be one of the main directions of industry transformation. As the sports industry introduces more market-oriented means, it is estimated that by 2025, the total scale of the sports industry will exceed 5 trillion yuan, and the sports industry will usher in a golden decade. At present, the growth rate of the production and sales of sports goods, clothing, shoes and hats has slowed down, while the high-value-added, high-margin sports service industry (upstream event resources and midstream media communication) has been in a long-term downturn. Traditional sports apparel companies need to find a breakthrough and integrate resources in the upstream of the industrial chain, which will be the future development trend. Among the listed companies, Guirenniao and many other companies have multi-faceted layouts in the sports industry.

　　 The fundamentals of the children's clothing industry are significantly better than other sub-sectors. With the birth peak, the full liberalization of the second-child policy, and the increase in the overall disposable income of residents, the willingness to consume children's clothing has gradually increased. According to the "2012-2015 Children's Clothing Industry Report" issued by the National Bureau of Statistics, the annual growth rate of the total output value of the children's clothing industry reached 25% to 30%; The scale of the children's clothing industry will exceed 300 billion yuan. And with the further increase of industry concentration, small and medium-sized enterprises are gradually eliminated, resources are gathered to leading enterprises, and core competitiveness is enhanced.

　　 Facing the considerable market prospects, apparel brand companies are accelerating their deployment in the children's clothing industry, and most of the existing industry leading brands are in a benign development stage driven by both extensional expansion and endogenous growth. As the purchase of children's clothing pays more and more attention to safety, comfort, a certain fashion and compatibility, the industry share is gradually concentrating to leading brand companies.

　　 The "her economy" surrounding the huge consumer market for women is another hot spot for transformation. According to statistics, the current domestic female consumer group has reached 480 million, and this consumer group has more income and more opportunities. The consumer industry related to the "her economy" covers a wide range of areas, with a market capacity of at least 5 trillion yuan, which is expected to become the outlet for the continued growth of the consumer industry in the future.

　　As the main force in the consumer market, female groups have shown higher consumer spending flexibility and purchasing enthusiasm during the rising stage of disposable income and social status. In terms of different industries, the growth and investment opportunities of apparel, underwear, cosmetics, medical beauty, tourism, jewelry and other markets of women's optional consumer goods are higher than those of consumer staples, which will become one of the main growth drivers of the optional consumer industry. In addition, the rapid development of the Internet has also given birth to innovations in the "her economy" business model. For example, various vertical e-commerce and social e-commerce based on women as the main body, as well as numerous O2O companies that are booming in medical beauty. These targets have certain potential relevance to individual textile and apparel stocks. In terms of listed companies, Longzi has carried out multiple overseas mergers and acquisitions around the fashion ecosystem, the targets mainly involve multiple industries such as cosmetics, and are active in increasing market value.

　　 In terms of cross-border e-commerce, online shopping mainly focuses on clothing, shoes and hats. According to data from the China E-commerce Research Center, the scale of cross-border e-commerce transactions in China in the first half of 2015 was 2 trillion yuan, a year-on-year increase of 42.8% and a penetration rate of 17.3%. Under the current sluggish import and export trade, cross-border e-commerce is showing a trend of vigorous development. In the past five years, the scale of cross-border e-commerce transactions has rapidly expanded from 0.84 trillion yuan to 3.75 trillion yuan, with a compound growth rate of 34.88%; the penetration rate has also increased from 4.0% to 14.2%, and it is expected to continue to increase in the future. Analysts pointed out that the industry is still in an early stage of development and is expected to be one of the important directions for the transformation of related companies.