The Winter Olympics boosted the consumption demand of ice and snow sports: according to the State Administration of sports, since Beijing successfully bid for the Winter Olympics in 2015, the number of residents participating in ice and snow sports across the country has been 346 million, and the participation rate of ice and snow sports has been 24.56%, realizing the overall goal of “driving 300 million people to participate in ice and snow sports”. According to the consumption trend report of the Spring Festival in the year of the tiger in 2022 released by Alibaba, from January 31 to February 4, the sales of tmall skiing equipment increased by more than 180% year-on-year, and the sales of ice sports increased by more than 300% year-on-year. In addition, according to the consumption observation of 2022 Spring Festival holiday released by JD, the overall turnover of skiing and ice sports commodities increased by 322% and 430% year-on-year from January 31 to February 5. We believe that under the catalysis of the Winter Olympics in the short term, local sports shoes and clothing brands related to the ice and snow sports industry chain are expected to benefit. We suggest paying attention to Anta sports, Li Ning, etc.
Market review: textile and garment sector: last week (January 24 to January 28, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 4.57%, – 5.00% and – 4.51% respectively. The textile and garment sector fell 4.46%, ranking 13th among 31 Shenwan industries; Among them, the textile manufacturing sector fell 3.98%, and the clothing and home textile sector fell 4.92%. In the past month (from December 29, 2021 to January 28, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 7.40%, – 10.18% and – 7.91% respectively, and the textile and garment sector fell by 5.06%, ranking ninth among the 31 Shenwan industries.
Cosmetics sector: the cosmetics sector fell 1.46% last week, outperforming the CSI 300 index by 3.05pct. The cosmetics sector fell 20.22% in the past month, underperforming the CSI 300 index by 12.31 PCT. Compared with the 31 industries of Shenwan, the cosmetics sector ranked first in the past week and 32nd in the past month.
Industry news: LVMH’s annual sales in 2021 increased organically by 36% year-on-year; Italian luxury goods company Zegna’s sales in Greater China increased significantly by 34% year-on-year in fiscal year 2021; Us luxury Capri company Q3 in fiscal year 2022 (up to December 25, 2021) increased 3% in Asia’s revenue, mainly due to the closure of Chinese mainland, travel restrictions and some city blockade. H & M’s net sales in fiscal year 2021 increased by 6% year-on-year; Estee Lauder’s sales in Q2 (October December 2021) of fiscal year 2022 increased by 14% year-on-year, and the sales in Asia Pacific increased by 7% year-on-year; Since January 28th, the regulations on sampling quality of cosmetics, such as the voice tiktok, will be formally implemented. Wowcolour received another round of a + financing of hundreds of millions of dollars.
Investment suggestions: 1) textile and garment industry: from the perspective of fundamentals, it is expected that the terminal retail demand is still relatively weak, but in January, due to the influence of the advance of the Spring Festival in 2022, the retail data of the current month is expected to perform better year-on-year, which is more objective from January to February. With the recent opening of the Winter Olympic Games, the attention and penetration of ice and snow sports have increased, and there is a catalyst for relevant sports shoes, clothing and equipment brands. In terms of subject matter, we continue to recommend sports track continued prosperity, sportswear related brands related to the Winter Olympics, Anta sports, Li Ning, Tebu international and Biem.L.Fdlkk Garment Co.Ltd(002832) with high-end positioning; In the field of non sportswear, it is suggested to pay attention to the leaders of undervalued sub categories, including home textile Luolai Lifestyle Technology Co.Ltd(002293) and men’s wear Baoxiniao Holding Co.Ltd(002154) (hazzys, a sports fashion brand under its control). In terms of textile manufacturing, we continue to recommend Shenzhou International, Huali Industrial Group Company Limited(300979) , which has strong growth sustainability and a solid position as a high-quality head manufacturer.
2) cosmetics industry: the cosmetics industry maintains the previous view, and the short-term data is expected to be relatively flat. The overall competition pattern is still grim. Regardless of tradition / cutting-edge, product power has become the basis of competition. We should pay attention to the brand with strong product power, strong brand power, differentiated positioning, diversified channels and healthy balance. We continue to recommend Proya Cosmetics Co.Ltd(603605) which actively improves the product power, has strong operation ability, has formed a clear strategic layout of multiple large single product series, multiple categories and multiple brands, has high performance growth, has a stable position as a subdivision leader, actively expands new categories and effects, and actively increases brand investment to improve influence.
Risk tip: the macroeconomic growth rate is down, and the terminal consumption is weak due to repeated epidemics or extreme weather, which affects the consumption demand of clothing, cosmetics and other products; The intensification of industry competition and the price war of foreign leading brands will have an adverse impact on China’s benchmark brands; E-commerce platform traffic growth slowed down and traffic costs increased.
