Monthly market review: the textile and clothing sector rose slightly and lost the overall market. In December 2021, the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 rose by 2.13%, 0.42% and 2.24% respectively, and the textile and garment sector rose by 1.61%, ranking 20th among the 30 primary industry sectors. Among textile and clothing stocks, Shangying Global Co.Ltd(600146) (+ 48.8%), Leshan Giantstar Farming&Husbandry Corporation Limited(603477) (+ 25.0%), Zhewen Pictures Group Co.Ltd(601599) (+ 19.6%) led the increase, and Shandong Ruyi Woolen Garment Group Co.Ltd(002193) (- 17.8%), Zhejiang Truelove Vogue Co.Ltd(003041) (- 12.5%) and Hangzhou Wensli Silk Culture Co.Ltd(301066) (- 12%) led the decrease.
View update: focus on investment opportunities under the trend of industry recovery and national consumption.
(1) Brand clothing: it is optimistic about the continuous recovery of performance and the trend of beneficiary countries.
From the perspective of medium and long term, we are optimistic about: ① some subdivided tracks with high growth rate, such as sports and children's wear leaders, Anta and Li Ning are recommended, and biyin and Senma are recommended; ② When the overall growth bonus of the industry is no longer, it is recommended to pay attention to Hailan, Senma, Shenzhen Ellassay Fashion Co.Ltd(603808) , Disu, etc; ③ For domestic clothing brands that conform to the new consumption trend of national tide, Li Ning, Bosideng, etc. are recommended.
From a short-term perspective, in 2020, due to the large proportion of offline channels, garment companies were seriously affected by the epidemic, and the industry ushered in a recovery in 2021. We are optimistic about: ① for companies with strong recovery and sustainability, we recommend Li Ning, Anta, Bosideng, Ningbo Peacebird Fashion Co.Ltd(603877) , and we recommend paying attention to biyin, Luolai, Jinhong, good news, etc; ② For companies whose recovery trend is still upward, it is recommended to pay attention to Hailan, Joeone Co.Ltd(601566) .
(2) Textile manufacturing: focus on investment opportunities brought by the improvement of concentration and downstream prosperity. With the weakening of China's manufacturing dividend and the gradual relocation of China's textile manufacturing industry, we are optimistic about the leading opportunities brought by the improvement of concentration and the extension of high-quality track (such as sportswear) in brand clothing. We recommend Huali and pay attention to Shenzhou, Jiansheng, Hangmin, etc.
Industry data tracking: (1) at China's retail end, the growth trend of clothing retail rebounded, but the overall trend was weak. In November, the retail sales of clothing, shoes, hats, knitwear, textiles and clothing were - 0.5% and - 1.2% respectively year-on-year, up 2.8pct and 1.6pct respectively compared with October. (2) At the export end, the export performance of textile and garment products is differentiated and the overall prosperity is maintained. In November, the exports of textile products and clothing were 10.0% and 22.8% respectively year-on-year, up 2.8 PCT and down 1.9 PCT respectively compared with October. (3) In terms of raw materials, cotton prices fluctuated at a high level. As of December 31, 2021, China's 328 grade cotton spot was 22107 yuan / ton (monthly increase or decrease, - 1.9%); American cotton 127.2 cents / pound (+ 3.4%); The price difference between domestic and foreign cotton is 1658 yuan / ton (- 34%).
Industry news tracking: (1) Nike's revenue in Greater China fell by 20% in fiscal year 2022. This is mainly because Nike China channel is dominated by offline physical stores, and the online layout lags behind. The epidemic has repeatedly impacted physical stores and affected their performance. (2) The head anchor closed the store, and the clothing agents benefited. On November 22, 2021, the State Administration of Taxation announced that Zhu Chenhui (Sydney) and Lin Shanshan would be punished according to law for tax evasion. Then the two anchors closed the live studio and Taobao store. Many e-commerce practitioners said that businesses and small and medium-sized anchors are the beneficiaries of the shock in the live broadcasting circle, and they are bound to reap new traffic.
Announcement of key companies: (1) equity transfer of Anta Sports: Chairman Ding Shizhong and his family have transferred 84.5 million shares without consideration through Anta international, accounting for about 3.13% of the issued shares. The transferee is hemin Holdings Co., Ltd. Anta will establish a public welfare charity "hemin foundation" with hemin holdings to cooperate in community development and other charitable and public welfare activities. (2) Bosideng's interim performance: during the six months ended September 30, 2021, the company's revenue was 5.39 billion yuan, a year-on-year increase of + 15.6%; The net profit attributable to the parent company was 638 million yuan, a year-on-year increase of + 31.4%. (3) Ningbo Peacebird Fashion Co.Ltd(603877) progress of shareholder reduction: half of the time of block trading reduction plan of shareholder hele investment (holding 4.4%) has passed. From November 11, 2021 to December 27, 2021, hele investment has not implemented reduction. (4) Dazzle Fashion Co.Ltd(603587) issuance of restricted shares: the restricted shares held by Ma Ruimin, the controlling shareholder and actual controller of the company (a total of 319 million shares, accounting for 66.33% of the total share capital) were issued for the first time, and were listed and circulated since December 22, 2021.
Risk tip: repeated outbreaks have led to weak terminal retail, sharp fluctuations in cotton prices, lifting of the company's ban on restricted shares, etc.
