Retail sales recovered in 2021, Q1 fluctuated slightly in 2022, and high-quality companies outperformed the industry. According to the data of social zero, the retail sales of clothing, shoes, hats and knitwear increased by 12.7% / – 0.89% year-on-year in Q1 in 2021 / 2022, and the overall social zero increased by 12.5% / + 3.27% year-on-year in the same period. At the level of listed companies, the revenue and performance of textile and clothing sector in 2021 increased by 24.9% / 52.2% year-on-year respectively. In 2022, the repeated epidemic had an impact on the industry. The revenue / performance of Q1 sector in 2022 was + 8.0% / – 9.0% respectively. High quality companies performed better than the average level of the sector.
Sports shoes and clothing: local brands will take off in 2021. The shoe and clothing market experienced rapid development in 2021. The total revenue / performance of the four Hong Kong stock sports companies in 2021 was + 39% / 70% year-on-year. Since 2022q1, the epidemic situation has superimposed the fluctuation of water growth under the high base. According to our tracking, since April, with the gradual decline of the base in the same period, the decline of terminal water flow has gradually narrowed. Considering the current long-term growth trend of sports shoes and clothing industry, we expect the companies in the sector to achieve steady growth throughout the year.
Fashion clothing: medium and high-end operations are divided, and the recovery of mass clothing is slowing down. Affected by the epidemic situation in the second half of 2021 and the warm winter, the growth rate of fashion clothing sector slowed down. 1) Medium and high-end clothing: high-quality brands lead the industry. In 2021, the revenue of key companies in the sector was + 12.1% / performance was + 33.9%. High quality companies operated stably under the fluctuation of the epidemic by promoting private domain flow control and product innovation. 2) Volkswagen clothing sector: 21q4 dragged down the whole year, and 22q1 terminal was under pressure. In 2021, the consumption intention of H2 clothing sector was relatively low, and Volkswagen clothing company was greatly impacted due to low consumer stickiness. The revenue / performance of key companies in the sector increased by 10.3% / 32.7% year-on-year in 2021, which has not yet returned to the pre epidemic level. In 2022q1, under the repeated epidemic, the terminal of the sector company was under pressure, and the performance declined to a certain extent.
Home textile sector: it will recover rapidly in 2021, and the long-term consumption upgrading will boost the scale expansion of the industry. From January to November 2021, the revenue of 1874 home textile enterprises above designated size increased by 7.69% year-on-year. Under the influence of base effect, epidemic fluctuation, natural disasters and other factors, the industry showed a trend of “high before low”. In 2022q1, the total revenue of key companies in the home textile sector increased by 3.5% year-on-year, and the net profit attributable to the parent decreased by 12.5% year-on-year. Looking forward to the whole year, we believe that home textile, as a relatively rigid consumer product, is expected to expand rapidly with the gradual decline of the impact of the epidemic and the emergence of the trend of consumption upgrading.
Clothing manufacturing: the upstream global supply chain was tested + the downstream demand recovered. In 2021, the orders inclined to the Chinese supply chain, and the cumulative amount of China’s clothing exports increased rapidly by 23.9% year-on-year. 1) Garment manufacturing: capacity driven growth, stable leading performance and accelerated industry concentration trend. In 2021, the revenue of key companies in the sector was + 10.7% / performance was + 2.4%. The performance of individual stocks varies according to the distribution of production capacity. 2) Outdoor manufacturing: the epidemic has catalysed the outdoor trend in Europe and the United States, thus driving upstream orders. Chinese outdoor manufacturing companies dominated by exports have benefited. The growth rate of revenue and performance of key companies in the sector in 2021 exceeded 40%, and the high growth in 2022q1 is expected to be maintained throughout the year.
Gold jewelry: gold jewelry continues to be hot, and the growth rate of terminal retail is rapid in 2021. The gold and jewelry sector performed extremely well in 2021. The total revenue of key companies in the sector increased by 32.9% year-on-year in 2021, and the net profit attributable to the parent increased by 56% year-on-year in 2020. In March 2022, the epidemic broke out, and the terminal consumption was blocked. In March alone, the retail sales of gold, silver and jewelry commodities of units above the quota decreased by 17.9% year-on-year. For a long time, we judge that residents’ demand for gold jewelry is increasing. At the same time, with the optimization and expansion of channels and the upgrading of product end by brands, the China National Gold Group Gold Jewellery Co.Ltd(600916) jewelry market is getting better.
Investment suggestions: 1) be optimistic about high growth sports tracks in the medium and long term, recommend [Li Ning, Anta sports, Tebu international and Shenzhou International], corresponding to 29 / 26 / 22 / 29 times of PE in 22 years, pay attention to Huali Industrial Group Company Limited(300979) , Zhejiang Natural Outdoor Goods Inc(605080) , Zhejiang Jasan Holding Group Co.Ltd(603558) , corresponding to 24 / 20 / 15 times of PE in 22 years. 2) Recommend high-quality brands with good fundamental growth, and recommend [ Biem.L.Fdlkk Garment Co.Ltd(002832) ], corresponding to 16 times of PE in 22 years. 3) Gold jewelry sales are hot. It is recommended that [ Lao Feng Xiang Co.Ltd(600612) ], corresponding to 12 times of PE in 22 years.
Risk warning: the impact of covid-19 epidemic exceeded expectations; Low end consumption risk; The impact of exchange rate fluctuations; The store expansion of each company is less than expected, and the new business is not carried out smoothly.
