Core view
Market review: A-share and US stock textile and clothing sectors performed better than the market. In March, the A-share market fell, the Hong Kong stock market fell, the US stock market rose, and the Taiwan stock market was flat; A shares and U.S. textile stocks performed better than the market. Brand channel: consumption picked up year-on-year in February, and the online growth of local sports brands was good in March. Clothing consumption has been under pressure since the second half of 2021, but the decline shows a narrowing trend, with - 0.5% / - 2.3% year-on-year from November to December respectively, and zero year-on-year + 4.8% in February this year. From 2022 to now, the online retail of wear category has increased by + 8% year-on-year. In February, tmall Jingdong textile clothing decreased year-on-year, and sportswear / shoes decreased by - 2.5% / - 11% respectively. In March, Nike and Adie accounted for - 19% and - 33% respectively in the flagship store of sports tmall, compared with - 34% and - 65% in March 2020. Anta, FILA, Li Ning and Tebu were + 21%, - 2%, - 13% and 11% respectively, with a year-on-year increase of 94%, 61%, 85% and 42% in March 2020. Tiktok, the overall sales of key sports brand sales in March were smaller, and Adidas's tiktok sales rebounded.
Manufacturing export: Vietnam's textile export has recovered significantly. Recently, the price of raw materials has been flat and the freight rate has decreased. From January to February 2022, China's textile exports will be + 25% / - 10%, and clothing exports will be + 17% / - 8%; Vietnam's textile exports have recovered significantly since November 2021, with year-on-year growth of 40% / 44% / 27% / 10% / 19% in November 2021, December 2021 and January March 2022 respectively. In March, the number of PMI units in China and Vietnam declined, and the startup rate in Shengze decreased slightly to 69% in late March; Since this year, the price of cotton has remained at a high level of about 22700 yuan / ton, and the price of nylon silk has slightly decreased or remained flat compared with last week; Since mid February this year, the freight rate has faced an inflection point and declined, with the comprehensive freight rate of - 4.4% in March. The exchange rate of the US dollar against the RMB fell slightly to 6.35.
Announcement of textile and clothing companies and industry news: in terms of a shares, Ningbo Peacebird Fashion Co.Ltd(603877) , Zhejiang Semir Garment Co.Ltd(002563) , Bros Eastern Co.Ltd(601339) , Zhe Jiang Taihua New Material Co.Ltd(603055) , Shenzhen Ellassay Fashion Co.Ltd(603808) , Zhejiang Sunrise Garment Group Co.Ltd(605138) , etc. publish annual reports or express reports. In terms of Hong Kong stocks, Anta sports, Li Ning, Tebu international, Shenzhou International and Baosheng international disclosed the annual report of 2021; In terms of news, UNIQLO Japan's sales in February were - 11.4% year-on-year, Adidas's Q4 China revenue in 2021 was - 24%, and Nike's Q3 China revenue in 2022 fiscal year was - 8%. Taobo's strategic cooperation brand has added domestic sports brand Li Ning.
Investment suggestion: Recently, the annual reports of textile and clothing companies have successively disclosed that sports brands at home and abroad have shown brilliant performance and operating efficiency. Although disturbed by China's epidemic since mid March, the short-term growth rate has slowed down, there is still room for sustained growth in the medium and long term, and we continue to be optimistic about the potential improvement of high-quality local sports brands and the growth prospects of the industry. Manufacturing enterprises generally have sufficient orders and tight supply. From the recent data, the cost pressure is gradually controllable, and they are optimistic about leading companies and high value-added enterprises with growth certainty and bargaining power. Hong Kong stocks mainly recommend Li Ning, Anta sports, Shenzhou International, Tebu international, Bosideng and taobo, and A-Shares mainly recommend Huali Industrial Group Company Limited(300979) , Zhe Jiang Taihua New Material Co.Ltd(603055) , Zhejiang Weixing Industrial Development Co.Ltd(002003) , Zhejiang Sunrise Garment Group Co.Ltd(605138) .
Risk tips: repeated impacts of the epidemic, intensified vicious competition among enterprises, international political and economic risks, and sharp fluctuations in exchange rates and raw material prices.
