Brand clothing point of view: Valuation digestion is basically in place, waiting for the turning point of water
Review on the fundamentals of clothing retail: from March to June 2021, the epidemic situation was controlled stably, and the clothing society was prosperous. However, since July, the point epidemic situation + typhoon and flood situation + overheating weather in September put pressure on clothing consumption, and the growth rate of clothing society was down
July became the market watershed: the clothing market reached Q2 in July, and the rise of the upsurge of domestic goods pushed up the fundamentals and valuation of brand clothing. However, the decline of social zero growth rate after July led to pessimistic expectations of clothing and home textiles. Since mid July, the plate market fell, and the valuation level of most companies returned to the level below the historical center
The cardinality problem deserves attention: from the perspective of two-year compound growth rate, the best performing months in 2021 from the perspective of social zero are May and June. At the same time, considering that the sales promotion effect of H & M event on local brands also occurs in 21q2, the cardinality problem leads to the market’s cautious investment in brand clothing in the near future
Overall view: Although the growth rate of brand clothing in the third and fourth quarters was lower than that in the first and second quarters under the influence of high temperature and repeated epidemic, the listed leaders were still better than the overall market performance, and the valuation was at a low level in the historical center after digestion since July. Therefore, from the target point of view, it is necessary to continue to focus on the subdivision leaders with medium and long-term logic and wait for the inflection point of water growth
Focus on target in subdivided fields
Sportswear: the market share concentration trend of domestic leading brands is still clear, the short-term high base pressure will not change, and the medium and long-term outlook will focus on Anta sports, Li Ning and Tebu international
Down jacket: Bosideng brand potential can continue to rise, and the effect of both volume and price continues
Fashion clothing: focus on the leaders of subdivided tracks with continuous channel expansion space / their own reform bonus, focusing on Biem.L.Fdlkk Garment Co.Ltd(002832) , Ningbo Peacebird Fashion Co.Ltd(603877) , Baoxiniao Holding Co.Ltd(002154)
Home textile: the trend of branded consumption is obvious, and the expansion of leading channels is active, focusing on Luolai Lifestyle Technology Co.Ltd(002293) , Shanghai Shuixing Home Textile Co.Ltd(603365) , Shenzhen Fuanna Bedding And Furnishing Co.Ltd(002327)
View of textile manufacturing: the global epidemic has brought the inflow of overseas orders + the rise in the price of raw materials, driving the high performance of most leading manufacturers
21q3 China’s textile and garment exports continued the previous high-speed growth momentum. Compared with Q2, China’s textile and garment exports continued to increase month on month in Q3. On the one hand, it benefits from China’s excellent epidemic prevention work and the recovery of overseas demand. On the other hand, it also benefits from the continuous production expansion and technological innovation of China’s leading export enterprises.
Overall view: in the long run, after the epidemic, overseas brands’ requirements for the stability of the supply chain continue to improve, and the single cost and quality factors will turn to more other factors (industrial chain integrity, external dependence, industrial chain recovery ability, social responsibility, staff life security, etc.). At the same time, the geographical diversification and decentralization of suppliers will become the mainstream. Therefore, we believe that after nearly 20 years of global layout experience, China’s leading suppliers have fully possessed the ability to further decentralize the supply chain layout. At the same time, the higher management efficiency and continuous automation / digital upgrading of China’s leading enterprises can also take into account the production cost while the supply chain is decentralized.
In addition, this year benefited from the inflow of overseas orders + the rise of raw material prices. Therefore, despite the challenge of rising shipping costs, the performance of leading enterprises in most segments is still outstanding. The sustainability of orders next year is the most concerned issue in the market. Therefore, it is necessary to choose suppliers in industries with relatively good demand and certainty
Focus on target in subdivided fields
Sports manufacturing leader: Shenzhou International and Huali Industrial Group Company Limited(300979) major customers have abundant orders. Under the stable epidemic situation, it is expected to maintain rapid growth in 22 years
Women’s sports industry chain: there is a bright future in the seamless market, focusing on Virgin and Zhejiang Jasan Holding Group Co.Ltd(603558)
Upstream material suppliers of outdoor sports: vigorous demand + leading technology creates high growth in the subdivided field, focusing on Zhe Jiang Taihua New Material Co.Ltd(603055) , Zhejiang Huasheng Technology Co.Ltd(605180)
Functional sunshade materials: there is sufficient room for permeability improvement, leading demand is high, and attention is paid to Shandong Yuma Sun-Shading Technology Corp.Ltd(300993) , Zhejiang Xidamen New Material Co.Ltd(605155)
Sofa fabric: high quality customers provide safety pads, new products bring imagination, pay attention to Zhongwang Fabric Co.Ltd(605003)
Risk statement
Risk tips for brand clothing companies: 1) high base risk caused by special events in 2021; 2) Dot epidemic affects consumption enthusiasm; 3) Weather affects consumption power
Risk tips for textile manufacturing companies: 1) the decline of export demand caused by trade friction; 2) Raw material cost fluctuation caused by commodity price fluctuation; 3) Unexpected fluctuation of exchange rate
（ Zheshang Securities Co.Ltd(601878) ）
