March 2022 social zero data: in March 2022, the total retail sales of social consumer goods fell by 3.53% year-on-year, lower than the consensus expectation of the wind market (0.83% year-on-year decline), with a cumulative year-on-year increase of 3.27%, and the cumulative growth rate slowed down by 3.43 PCT month on month (January to February, the same below) Among them, clothing retail sales fell by 12.70% year-on-year in March, with a cumulative year-on-year decline of 0.89%, and the cumulative growth rate turned to decline month on month; Cosmetics retail sales fell 6.30% year-on-year in March, with a cumulative year-on-year increase of 1.81%, and the cumulative growth rate slowed down by 5.19 PCT month on month.
The two ministries and commissions jointly issued the guiding opinions on the high-quality development of industrial textiles industry: the opinions put forward the development goal: by 2025, the industrial added value of Enterprises above Designated Size will increase by about 6% annually; 3 ~ 5 enterprises have entered the first echelon of global industrial textiles; The ability of scientific and technological innovation has been significantly improved, and the proportion of R & D funds of key enterprises in the industry in the main business income has reached 3%; The application of recycled fiber and biomass fiber accounts for 15%; The NC rate of key processes in nonwovens enterprises reaches 70%.
Market review: textile and garment sector: last week (April 18 to April 22, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 3.87%, – 5.12% and – 4.19% respectively, and the textile and garment sector increased by 4.09%, ranking first in 31 Shenwan industries; Among them, the textile manufacturing sector rose 4.85%, and the clothing and home textile sector rose 5.81%. In the past month (from March 23, 2022 to April 22, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index increased by – 5.31%, – 10.29% and – 5.69% respectively, and the textile and garment sector fell by 0.93%, ranking eighth among the 31 Shenwan industries.
Cosmetics sector: the cosmetics sector rose 4.77% last week, outperforming the CSI 300 index by 8.96 PCT Over the past month, the cosmetics sector rose 20.82%, outperforming the Shanghai and Shenzhen 300 index by 26.50pct 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: Kaiyun group’s revenue in the first quarter of fiscal year 2022 increased by 21% year-on-year; Lululemon announced a new growth strategy – power of three × 2. It is expected that China will become the second largest market in the world by 2026; L’OREAL group’s revenue in the first quarter of fiscal 2022 increased by 14% compared with the same period last year, and the Chinese mainland’s revenue grew by two digits. P & G’s revenue in the third quarter of fiscal year 2022 increased by 10% year-on-year, and the beauty sector increased by 2% year-on-year; Johnson & Johnson’s beauty business revenue fell 13% year-on-year in the first quarter of fiscal 2022.
Investment suggestions: 1) textile and garment industry: in terms of downstream brand clothing, the social zero data in March shows that there is great short-term pressure on optional consumption, and the end consumer demand still needs to pay attention to the epidemic situation, especially the progress of prevention and control in Shanghai and other places. It is expected that the pressure on retail data will still exist in April. At the same time, if the epidemic situation is gradually controlled properly, the retail end will be repaired. It is expected that the second quarter will be the low point of the whole year, and the industry is expected to have marginal improvement. In terms of target selection, on the one hand, based on long-term suggestions, focus on the sports clothing leaders that have passed the high base period of the second quarter, the valuation correction is 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 suggested to pay attention to Biem.L.Fdlkk Garment Co.Ltd(002832) , the representative of high-end sports and fashion relatively less affected by the epidemic, and Luolai Lifestyle Technology Co.Ltd(002293) with long-term stable leading pattern, steady growth and high dividend attribute. Recently, brand clothing retail is generally facing demand side pressure, and the performance of the upstream manufacturing sector is relatively stable. At the same time, the recent devaluation of the RMB exchange rate has brought some benefits. We also recommend manufacturing leaders Huali Industrial Group Company Limited(300979) , Shenzhou International, whose orders are stable and the leading share continues to increase.
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 expected to be limited throughout the year. We maintain the previous view and continue to recommend Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , etc. with strong product power.
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.
