Norwegian sovereign fund announced that Li Ning would be excluded from the investment list: on March 7, 22, the Norwegian government’s global pension fund issued a document saying that due to the Xinjiang cotton incident, it decided to exclude Li Ning from the investment of gpfg. We believe that we need to be cautious about the direction of this matter in the future. Since this action has nothing to do with the fundamentals of the company, we can actively pay attention to the valuation of Hong Kong stock sportswear companies. When falling out of the safety margin will bring a good opportunity for long-term investment, Anta sports, Li Ning and Tebu international are recommended.
Textile and garment export data from January to February 2022: according to the statistics of the General Administration of customs, the cumulative export volume of China’s textile yarn, fabric and products from January to February 2022 was US $24.741 billion, a year-on-year increase of 11.85%, and the cumulative growth rate rebounded from – 5.60% in December last year; The cumulative export volume of clothing and clothing accessories was US $25.461 billion, a year-on-year increase of 6.10%, and the cumulative growth rate slowed down compared with 24.00% in December last year.
USDA monthly report on cotton production, sales and inventory in March 2022: according to the forecast of USDA monthly report in March 2022, compared with February 2022, the global cotton production forecast in 2021 / 22 is reduced by 66000 tons, the consumption is increased by 24000 tons, the import is reduced by 35000 tons, the export is reduced by 38000 tons, and the ending inventory is reduced by 377000 tons. The cotton output, consumption, import and ending inventory forecast of China in 2021 / 22 remain unchanged.
Market review: textile and garment sector: last week (March 7 to March 11, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 4.00%, – 4.40% and – 4.22% respectively, while the textile and garment sector fell by 4.99%, ranking 22nd among 31 Shenwan industries; Among them, the textile manufacturing sector fell 4.75%, and the clothing and home textile sector fell 4.74%. In the past month (from February 9, 2022 to March 11, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 4.14%, – 6.59% and – 6.56% respectively, and the textile and garment sector fell by 4.25%, ranking 14th among the 31 Shenwan industries.
Cosmetics sector: the cosmetics sector rose 1.14% last week, outperforming the CSI 300 index by 5.37pct, rising 2.96% in the past month, outperforming the CSI 300 index by 9.52pct. Compared with 31 industries in Shenwan, the cosmetics sector ranked first in the past week and third in the past month.
Industry news: the revenue of Adidas Greater China increased by 3% year-on-year in fiscal year 2021; Gucci and Adidas jointly released the co branded series for the first time; Huaxizi will invest more than 1 billion yuan in product research and development in the next five years; On March 11, Aoki Co., Ltd., a beauty brand e-commerce service provider, was listed on the Shenzhen Stock Exchange; In 2021, the revenue of Yixian e-commerce increased by 11.6% year-on-year, and the net loss narrowed by 42.5% year-on-year; Hermes launched a new facial makeup series.
Investment suggestions: 1) textile and garment industry: the recent epidemic has repeatedly adversely affected the terminal passenger flow. At the same time, the war between Russia and Ukraine continues to promote the rise of risk aversion. The aftermath of the Xinjiang cotton incident has not been smooth, which has adversely affected the normal operation and stock price of enterprises, and dragged down the overall Hong Kong stock sportswear sector. We continue to suggest that from the perspective of sound defense, we should pay attention to the related subjects of undervalued and high dividend yield in the field of textile and clothing. In terms of targets, we have long recommended sports clothing related brand targets. Recently, the sports clothing sector in Hong Kong stock market fell due to the Xinjiang cotton incident. There may be a game of funds from outside China in the short term, but based on the good investment time point in the long term, we continue to recommend Anta sports, Li Ning and Tebu International; It is suggested to pay attention to Luolai Lifestyle Technology Co.Ltd(002293) , Biem.L.Fdlkk Garment Co.Ltd(002832) , Baoxiniao Holding Co.Ltd(002154) . The performance of textile manufacturing in the past 21 years has gradually become clear, and Huali Industrial Group Company Limited(300979) , Shenzhou International have been recommended for a long time.
2) cosmetics industry: maintain the previous view that the general environment of intensified industry competition, increased layout of international brands, differentiated consumer demand and stricter industry supervision still exists. It is considered that Chinese brands still need to make continuous innovation and breakthrough in product strength. Although the “38” e-commerce promotion does not rank among the top in the annual promotion, it can be seen from the multi-dimensional comparison of product power and marketing investment of various cosmetics brands. Companies that have accumulated relevant large single products and have formed strong product strength will perform more prominently. Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) .
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.
