Zhou’s views and investment suggestions
The Yoga track is booming, and lululemon’s performance is growing brightly: with the improvement of women’s income and social status, yoga has accelerated its penetration. In 2020, the output value of the global Yoga market will reach US $33.7 billion, and the compound growth rate is expected to be 7.6% in the next 10 years. Lululemon, the industry leader, led in high quality. In 2021q1-3, the total revenue / net profit of the company reached US $4.128541 billion respectively, with a year-on-year increase of 55% / 109% respectively; At present, lululemon has entered the stage of comprehensive expansion and has opened 520 + stores in more than 20 countries.
China’s Yoga market is expanding rapidly. Domestic sports brands focus on women’s sports series, and the market share is expected to increase. In 2020, the overall scale of China’s yoga industry will reach 38.7 billion yuan, of which the market scale of yoga products will reach 18.7 billion yuan. According to the outstanding performance of lululemon, we believe that Chinese sports brands Li Ning, Anta, FILA and Tebu will increase their investment in product design and marketing in the women’s sports sector, and their market share in this business is expected to increase in the future.
Demand drives the rapid growth of the upstream, and the leading enterprises of raw materials and OEM in the upstream of sportswear will fully benefit. 1) Zhe Jiang Taihua New Material Co.Ltd(603055) : the company has carried out in-depth cooperation with downstream sports, outdoor leaders lululemon, Decathlon, Anta and other brands, with stable orders; With the increase of nylon 66 production capacity and the breakthrough of renewable technology, the cooperative relationship with high-quality brands is expected to be further deepened in the future. 2) Zhejiang Jasan Holding Group Co.Ltd(603558) : since 2020, the company has vigorously expanded high-quality customers in the seamless business sector and successively reached cooperation with Li Ning and lululemon. With the steady progress of epidemic repair and the strong demand for downstream sportswear, the performance of the company in the seamless business in the future is worth looking forward to.
Investment suggestion: the brand side suggests focusing on its own strength α、 Li Ning, Anta sports, Tebu international, etc., with a wider customer base and a steadily upgraded brand; At the textile manufacturing end, it is suggested to pay attention to the manufacturing of functional leading and downstream high-quality sports brands and raw material suppliers Zhejiang Jasan Holding Group Co.Ltd(603558) , Zhe Jiang Taihua New Material Co.Ltd(603055) etc.
Data and announcement tracking
Market review: last week (February 21, 2022 ~ February 25, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 fell – 1.13%, 0.35% and – 1.67% respectively, and the textile and garment sector fell – 0.42%, of which the textile sector fell – 0.67% and the garment sector rose – 0.70%.
Raw material price: 328 grade cotton spot 22816 yuan / ton (- 0.04%, weekly rise and fall); American cotton Cotlook A137 4 cents / pound (0.15%); The price difference between domestic and foreign cotton is 1510 yuan / ton (5.22%).
Announcement of key companies: 1) Hunan Mendale Hometextile Co.Ltd(002397) : the company recently granted 4.2 million reserved stock options to 30 incentive objects who met the grant conditions, with the exercise price of 4.02 yuan, and 800000 reserved restricted shares to one incentive object who met the grant conditions, with the grant price of 1.98 yuan. 2) Zhejiang Jasan Holding Group Co.Ltd(603558) : as of the date of this announcement, Mr. Zhang Maoyi has reduced 7.8 million shares through block trading, accounting for 1.99% of the total share capital of the company. More than half of the shares are reduced in this reduction plan, and the reduction plan has not been implemented yet.
Risk tips
Risk of repeated fluctuation of epidemic and exchange rate in Vietnam.
