Textile and garment export data in March: according to the statistics of the General Administration of customs, the export volume of China’s textile yarn, fabric and products in March 2022 was US $11.825 billion, with a year-on-year increase of 22.24% in March and a cumulative year-on-year increase of 15.10% from January to March; The export volume of clothing and clothing accessories was US $10.224 billion, with a year-on-year increase of 10.50% in March and a cumulative year-on-year increase of 7.40% from January to March. The cumulative growth rate of the export volume of textiles and clothing in March was accelerated. In the first quarter of 2022, the export growth trend of textiles and clothing was good, reflecting the continuous increase of overseas demand. In the future, we still need to pay attention to two aspects: first, the impact of the overseas epidemic is weakened, and the return trend of orders is gradually decreasing or entering normalization, testing the order retention ability of local enterprises; Second, the recent epidemic situation in China has spread in many places, which may adversely affect the normal production and logistics transportation of enterprises.
Market review: textile and garment sector: last week (April 11 to April 15, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 1.25%, – 2.60% and – 0.99% respectively, while the textile and garment sector fell by 3.47%, ranking 19th among 31 Shenwan industries; Among them, the textile manufacturing sector fell 3.90%, and the clothing and home textile sector fell 2.61%. In the past month (from March 16, 2022 to April 15, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by + 4.81%, + 0.96% and + 5.14% respectively, and the textile and garment sector increased by 1.27%, ranking 21st among 31 Shenwan industries.
Cosmetics sector: the cosmetics sector rose 4.85% last week, outperforming the Shanghai and Shenzhen 300 index by 5.84pct. Over the past month, the cosmetics sector rose 24.52%, outperforming the Shanghai and Shenzhen 300 index by 19.38pct. Compared with 31 industries of shenwanyi level, the cosmetics sector ranked second in growth in the past week and third in growth in the past month.
Industry news: LVMH’s sales in the first quarter of fiscal year 2022 increased by 29% year-on-year. The company is full of confidence in the medium and long-term demand of the Chinese market; Affected by the impact of the epidemic, the sales and profits of fast retailing group in Greater China fell in the first half of fiscal year 2022; Hermes group’s sales in the first quarter of fiscal year 2022 increased by 33% year-on-year; The technical guidelines for children’s cosmetics (Draft for comments) was issued; Yixian e-commerce, the parent company of perfect diary, may face delisting risk; An e-commerce Co., Ltd. in Shandong was fined for claiming that the product has the effect of promoting “eyelash growth”.
Investment suggestions: 1) textile and clothing industry: in terms of downstream brand clothing, the end consumer demand still needs to pay attention to the epidemic situation, especially the prevention and control progress in Shanghai and other places. It is expected that the retail data in March and April will be under pressure. At the same time, with the gradual easing of the epidemic situation, the retail end will be gradually repaired, and the second quarter is expected to be the low point of the whole year. In terms of target selection, on the one hand, it is recommended to pay attention to the sports clothing leaders with the valuation correction in place and the long-term logic is still clear, including Anta sports, Li Ning and Tebu international. On the other hand, it is also recommended to pay attention to the high-end sports fashion representatives Biem.L.Fdlkk Garment Co.Ltd(002832) , the leaders with long-term stable pattern and steady growth, etc. Recently, the retail of brand clothing is generally facing demand side pressure. We recommend Huali Industrial Group Company Limited(300979) , Shenzhou International, which are leading manufacturers with stable orders and continuous improvement of leading share.
2) cosmetics industry: the cosmetics industry maintains the previous view. The environment of intensified industry competition, increased layout of international brands and fine differentiation of consumer demand still exists. The industry supervision is further strict, and continue to pay attention to the shaping and continuous breakthrough of Chinese brands in the product power of the core competitive elements. Short term sales are in a relatively low season. Although the epidemic is expected to cause some interference to offline consumption and online logistics delivery, the impact is limited. We maintain the previous view and continue to recommend Proya Cosmetics Co.Ltd(603605) and other sensitive skin care leaders Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , which actively improve the product power, have strong operation ability, have formed a clear strategic layout of multiple large single product series, multiple categories and multiple brands, have high performance growth, have a solid position as subdivided leaders, actively expand new categories and effects, and actively increase brand investment to enhance influence.
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.
