Core view
Market review: in recent two weeks, the top five companies in the A-share textile and garment sector are Comefly Outdoor Co.Ltd(603908) , Shenzhen Ellassay Fashion Co.Ltd(603808) , Fujian Sbs Zipper Scienceand Technology Co.Ltd(002098) , Dazzle Fashion Co.Ltd(603587) , Beijing Sanfo Outdoor Products Co.Ltd(002780) ; The top five companies in the textile and garment sector of Hong Kong stocks were Sijie global, Baosheng international, China LiLang, Yongsheng new materials and Prada. Looking at the PE (next 12 months) range of the company in the past two years, the P / E ratio of most A-share and Hong Kong stock related companies is at the bottom of historical valuation. We suggest paying attention to the allocation opportunities after the valuation correction of high-quality companies.
Data tracking: from January to February 2022, social zero was + 9.1% year-on-year, and clothing retail was + 4.8% year-on-year. It still achieved steady and good growth under the high base of last year; In March, Salomon, Archaeopteryx, Kolon, Bosideng, Biem.L.Fdlkk Garment Co.Ltd(002832) , respectively, increased 148%, 77%, 66%, 55% and 50% in tmall’s official flagship stores of sports textile clothing. On April 13, 328 cotton price index (yuan / ton) was 22814, a month on month increase of + 0.2%; The price difference between domestic and foreign cotton (yuan / ton) is – 989. In the past two weeks, the average startup rate of water jet loom in Shengze area was 66.3%, down 2.7P month on month p.。 In the past week, the price of nylon 66 chips was 39333 yuan / ton, down from – 2.28% last week; In the past week, the price of nylon fiber was 19933 yuan / ton, down from – 1.81% last week.
Jiaoxia, the leader of sunscreen clothing in China, will be on the market soon. The market scale of sunscreen clothing is 60 billion, and China has great growth potential. Jiaoxia is the leader of sunscreen in China, accounting for 13% of the online listing. In terms of finance, the revenue growth is strong, the gross profit margin is good, and the operation is highly healthy. In terms of business, sunscreen clothing accounted for 80%, driving the flow growth, online DTC accounted for 80%, and the repurchase rate increased to support the growth of channels.
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Industry trends: McKinsey reported that discount retail is expected to grow rapidly after the epidemic; LV released its first quarter results.
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) , Biem.L.Fdlkk Garment Co.Ltd(002832) , Zhejiang Sunrise Garment Group Co.Ltd(605138) .
Risk warning: repeated epidemic situation; Deterioration of competition; Price fluctuation of raw materials; Systemic risk.
