Asia Faces a Dressing Down
HONG KONG -- The death of global textile-garment quotas Dec. 31 will unleash a flood of inexpensive apparel onto world markets. It could also designate new corporate winners and losers, not just among Asia's textile and garment companies, but also among middlemen sourcing companies, port operators and container makers.
For investors willing to endure the initial shakeout uncertainty, the development could offer buying opportunities, though they may want to avoid companies with riskier short-term exposure.
As much as $42 billion in orders could potentially shift to manufacturing powerhouses like China from less-competitive countries after the lifting of the global quota, according to the American Textile Manufacturing Institute.
A STITCH IN TIME
See an interactive graphic on what the expiration of textile quotas means to the industry.
Consumer-retail analyst Paul McKenzie of CLSA Asia-Pacific Markets said some countries like Honduras and Cambodia could be hit with double-digit losses in their gross domestic product. Even some garment-trade players, like China's debt-heavy, state-owned textile manufacturers, won't have it easy as competition heats up, he says. "Long-term, there'll be some casualties as well as some big winners across the board. The landscape is going to change substantially."
In the short term, the increasingly likelihood that the U.S. will implement protectionist measures early next year could curb any short-term gains enjoyed by China-based companies. Fears of possible protectionist measures are already making investors jittery; during the past six months, the Shenzhen Stock Exchange's Textile Index -- a composite basket of China's major listed textile stocks -- plunged by one-fifth, to 280 from 350. The Shenzhen Stock Exchange Composite Sub-index, the benchmark of Shenzhen-listed companies, dropped only 8% for the period.
But analysts expect any protectionist measures to distort the market only temporarily. "The demand is there; you cannot hold it back forever," says Andrew Kuet, head of small-capitalization-stock research at Australian Macquarie Securities. "When things work out according to economic forces, apparel companies will see higher volumes."
For now, core textile companies like China-based Weiqiao Textile, Fountain Set and Texwinca, as well as India's Arvind Mills, could prove safer investments than China's garment companies. That is because these textile companies not only are expected to benefit from a surge of orders to China post-quota, but they would also be able to continue selling fabric to foreign apparel manufacturers even if the U.S. imposes safeguard measures on China's garment producers, say analysts.
In addition, these textile companies don't suffer from the fierce competition plaguing the garment business, as the heavy machinery requirements, strict environmental regulations and compliance factors facing the textile industry have created high barriers to entry. In the post-quota world, "the bargaining power of the leading fabric suppliers is likely to be strengthened," Morgan Stanley analyst Angela Moh wrote in a research note.
In the long term, apparel companies that source from China, like Esprit Holdings and Giordano, are expected to do well post-quota, with lower sourcing costs translating into competitively priced products. Merrill Lynch analyst Jeanine Angell, who reiterated her "buy" rating on Esprit, says its retail margins should improve from 7% to at least 10% in 2005, with Asian sales, its weak point, expected to pick up.
Other industries likely to benefit are shipping-related businesses active in China. Already, textiles and apparels account for 5% to 15% of total shipments from China. Capacity at China's ports near major manufacturing centers like Shenzhen, the southern Chinese city bordering Hong Kong, is expected to expand by 60% to 100% during the next five years. Likely beneficiaries of the quota removal are Hong Kong-listed shipping company Cosco Pacific, port-machinery maker Shanghai Zhenhua Port Machinery and China International Marine Containers (Group), which CLSA says is the world's largest container-box manufacturer.
Not all China-related businesses are likely to emerge winners. CLSA's Mr. McKenzie says Hong Kong container port company China Merchants Holdings is vulnerable, as 28% of its profit comes from Hong Kong's ports, which could lose significant China trade once quotas come down. According to industry analysts, many garment producers circumvent the current quotas by sending Chinese-manufactured goods to Hong Kong for minor finishing touches and then shipping them under the city's quota.
The future role of middlemen firms like Hong Kong-based Li & Fung and Linmark, which help companies source garments amid a complex quota system, is also uncertain. The removal of quotas will significantly bring down the cost of garments, meaning fewer commission dollars for sourcing companies. Also, supply chains are expected to shrink in the post-quota world, with retailers sourcing from a handful of factories. CLSA says that of the two companies, Linmark is more vulnerable, as it hasn't heavily diversified its nonapparel sourcing business, and will have 50% to 60% of revenue exposed to quota removal.
Both companies have been trying to minimize their exposure by increasing value-added services such as product design. but maintaining past double-digit growth rates will be difficult, says Hang Seng Bank chief economist Vincent Kwan.
后配额时代谁主沉浮
从12月31日起全球纺织服装配额将退出历史舞台，而大量的廉价服装将如潮水般涌入世界市场。这会引发多个领域竞争格局的改变，所涉及的领域不仅包括亚洲的纺织和服装界，还包括采购中间商，港口运营商以及集装箱制造商。
如果投资者愿意承担初期局势不明朗所带来的风险，就有可能在避开那些短期风险较高的股票的同时，找到一些买入机会。
美国纺织品生产者研究院(American Textile Manufacturing Institute)预计在全球服装配额取消后，将有高达420亿美元的订单从竞争力较差的一些国家转向中国等纺织大国。
里昂证券(CLSA)亚太市场消费者零售分析师保罗?麦肯孜(Paul McKenzie)预计像洪都拉斯和柬埔寨这些国家的国内生产总值可能会出现两位数的下降。即使是中国负债累累的国有纺织生产商，随著竞争的升温也不会感到轻松。麦肯孜表示：“长期来说，将有人被淘汰出局，也会有一些大赢家。市场竞争格局将有很大的转变。”
从近期来说，美国明年年初采取贸易保护主义措施的可能性日益上升，可能会抑制中国公司的短期得益。此类担忧早已反映在了股市中：过去6个月，深圳证券交易所的纺织指数下跌1/5，从350点跌至280点。同期，基准的深圳成分指数跌幅仅8%。
但分析师们认为，任何保护主义措施对市场产生的扭曲效应都只会是暂时的。“需求在那儿，你不可能永远地抑制住它，”澳大利亚Macquarie Securities的小型股研究主管安德鲁?库特(Andrew Kuet)表示，“当经济力量发挥作用时，服装公司的销售必将增长。”
至于目前，投资核心纺织公司，如在香港上市的中国公司魏桥纺织(Weiqiao Textile)、福田实业(Fountain Set)、德永佳集团(Texwinca)以及印度的Arvind Mills，应比投资中国的服装公司更为安全。分析师们解释称，纺织公司将不仅能受益于后配额时代中国订单的猛增，而且即使美国针对中国的服装生产商实施保护主义政策，他们也还能继续将纺织面料卖给外国服装公司。
此外，这些纺织公司也没有遇到服装行业普遍存在的激烈竞争。开办纺织企业需要有重型机械，需要接受严格的环境监管和遵守诸多规定，这使得纺织行业的进入门坎很高。在后配额时代，“大纺织供应商的讨价还价能力可能会得到加强，”摩根士丹利(Morgan Stanley)分析师莫仁瑛(Angela Moh)在一份研究报告中写道。
长期来讲在后配额时代，预计思捷环球(Esprit Holdings)和佐丹奴国际(Giordano)等从中国采购的服装公司将运营良好，采购成本的降低将转化为产品价格竞争力的提高。美林(Merrill Lynch)分析师杰宁?安格尔(Jeanine Angell)重申对思捷环球的评级为买进，并预计2005年思捷环球的零售利润率应能从7%至少提升至10%，而作为弱项的亚洲销售额预计将加速增长。
其他可能受益的行业还有活跃在中国市场上的船运公司。纺织品和服装已经占到了中国出口船运量的5%至15%。未来5年，深圳等中国主要制造中心附近的港口的吞吐量预计将扩大60%至100%。配额取消后的潜在受益者是在香港上市的船运公司中远太平洋(Cosco Pacific)、上海振华港口机械股份有限公司(Shanghai Zhenhua Port Machinery)和被里昂证券称为全球最大的集装箱生产商中集集团(China International Marine Containers (Group))。
并不是所有与中国相关的业务都可能成为赢家。里昂证券的麦肯孜就指出，香港的集装箱码头公司招商局国际(China Merchants Holdings)就可能处于不利境地，其28%的利润来自香港码头，一旦配额取消它就可能失去大量的中国贸易运输订单。据行业分析师称，许多服装生产商为规避现行的配额限制，通常的做法就是把中国制造的商品先运往香港，稍做改动后再动用香港的配额出口。
香港的利丰(Li & Fung)和林麦集团(Linmark)这些帮助其他公司在复杂的配额体系下进行服装采购的中间商，其未来的地位也处于不确定中。配额的取消将显著降低服装的价格，这意味著采购公司的佣金将下降。此外，后配额时代供应链预计也会缩短，零售商将从屈指可数的几家工厂进行采购。里昂证券表示，相比利丰，林麦集团的处境更不利，因为其仍然十分依赖服装采购业务，大约有50%至60%的收入将受配额取消的影响。
恒生银行(Hang Seng Bank)首席经济学家关永盛(Vincent Kwan)表示，无论是利丰，还是林麦集团两家公司都在试图通过提供产品设计等附加值服务，将风险降到最低，但估计它们难以保持两位数的业绩增长。
