The United States re exempted 352 tariffs on Chinese imports: the office of the U.S. trade representative issued a statement on March 23, 2022, which will re exempt 352 tariffs on Chinese imports. The regulation will apply to goods imported from China from October 12, 2021 to December 31, 2022, including a number of textile products. We expect that in the short term, it will benefit China’s textile and garment exports and enhance the international competitiveness of China’s textile manufacturing enterprises, but we still need to pay attention to the relevant progress of Sino US trade friction.
Summary of 21 year performance of Hong Kong stock sportswear targets: last week, the representative targets of Hong Kong stock sportswear sector have disclosed the performance of 2021. Under the background of frequent epidemics and weak consumption, the performance of relevant targets still achieved beautiful growth performance. Anta sports / Li Ning / special step international / 361du 21 year revenue increased by 38.9%, 56.1%, 22.5% and 15.7% respectively year on year, and net profit attributable to parent increased by 49.6%, 136.1%, 77.1% and 45.0% respectively year on year. Looking forward to 22 years, Anta’s main brand water growth target is more than 20% and FILA is 15 ~ 20%; Li Ning’s revenue growth target is 15 ~ 25%; The growth rate of Tebu’s main brand revenue is about 25 ~ 30%. Overall, the sportswear sector is still the sub industry with the highest mid-range bearing in the brand clothing industry, and continues to be optimistic about relevant targets, forge ahead and improve market share.
Market review: textile and garment sector: last week (March 21 to March 25, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 1.19%, – 2.08% and – 2.14% respectively, and the textile and garment sector increased by 1.04%, ranking seventh among the 31 Shenwan industries; Among them, the textile manufacturing sector rose 2.25%, and the clothing and home textile sector rose 0.56%. In the past month (from February 23, 2022 to March 25, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 7.08%, – 9.21% and – 8.74% respectively, and the textile and garment sector fell by 7.33%, ranking 10th among the 31 Shenwan industries.
Cosmetics sector: the cosmetics sector rose 6.38% last week, outperforming the CSI 300 index by 8.52pct. The cosmetics sector rose 3.88% in the past month, outperforming the CSI 300 index by 12.61 PCT. Compared with 31 industries of shenwanyi level, the cosmetics sector ranked first in terms of growth in the past week and first in terms of growth in the past month. Industry news: Valentino (Valentino), an Italian luxury goods company, will focus on the Chinese market in the next expansion; Belle fashion group submits a prospectus to the Hong Kong Stock Exchange; Mistine mistine, a beauty brand, has recently completed a round of financing of more than 200 million yuan; Intercos, an Italian cosmetics giant, achieved a revenue of 4.725 billion yuan in 2021, with a year-on-year increase of 11.1%; L’Oreal proposed the co-x coevolution model in 2022; Guangzhou Saiyin legal person was banned from engaging in cosmetics production and business activities for 10 years.
Investment suggestions: 1) textile and garment industry: in terms of downstream clothing brands, the epidemic has shown a multi-point distribution trend since March, especially in high-speed cities such as Shanghai and Shenzhen, which are obviously impacted by the epidemic. It is expected that the short-term offline passenger flow will resume under pressure. In addition, the online delivery and receipt will also be affected to some extent, and the clothing consumption as one of the optional categories still needs to recover. In terms of upstream textile manufacturing, the United States proposed to exempt tariffs on a number of Chinese imported goods including textiles, and the Sino US trade friction will gradually weaken or even eliminate, which will benefit China’s textile and garment exports and enhance the international competitiveness of China’s textile manufacturing enterprises in the short term. We continue to suggest that from the perspective of sound defense, we should pay attention to the related targets of undervalued and high dividend yield in the field of textile and clothing (see the attached table for details). In terms of stock targets, 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) . Huali Industrial Group Company Limited(300979) and Shenzhou International will continue to be recommended for textile manufacturing 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. There are few short-term e-commerce promotion activities, and more attention is paid to the building of product power and brand power in normal consumption. Combined with the above background, we believe that companies with large product accumulation and strong product power will perform more prominently, and continue to recommend Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , etc.
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.
