Market review: in recent two weeks, the top five companies in the A-share textile and garment sector are Comefly Outdoor Co.Ltd(603908) , Shanghai Sanmao Enterprise (Group) Co.Ltd(600689) , duolik, Beijing Sanfo Outdoor Products Co.Ltd(002780) , Hunan Mendale Hometextile Co.Ltd(002397) . In the past two weeks, the top five companies in the textile and garment sector of Hong Kong stocks were Sijie global, Guancheng watch and jewelry, Jiuxing holdings, Baihong industry and shijibao. Looking at the PE (next 12 months) range of related companies in recent 2 years, after early adjustment, the P / E ratio of most A-share and Hong Kong stock related companies is at the bottom of historical valuation, and some companies have shown signs of valuation repair recently.
Data tracking: 1) in terms of retail, in April 2022, there was no year-on-year increase of - 13% for limited social organizations and - 29% for clothing retail; Tmall and jd.com's online retail of women's wear, men's wear, children's wear, sportswear and sports shoes in March was - 26%, - 23%, - 14%, - 11% and - 10% year-on-year; In April 2022, the key brands tmall flagship store, the top five brands are Kelong, Nike, Shengdao, keep, Biem.L.Fdlkk Garment Co.Ltd(002832) , with a year-on-year increase of 175%, 120%, 79% and 60%. 2) In terms of manufacturing exports, Vietnam continued to maintain a high economic situation, with an increase of 22% under the high base in April, while China was affected by the epidemic blockade. In April, textile and clothing exports increased by 1% and 2% year-on-year respectively. 3) In terms of cost, both domestic and foreign cotton prices have decreased recently, and the price of nylon 66 chips has decreased to a relatively normal level since the beginning of the year. It is expected that the raw material cost of textile manufacturing enterprises will be gradually controlled.
Industry trends: the download volume of sheen application has exceeded that of Amazon and Shopify for three consecutive months; MOSCHINO's parent company doubled its profit in the first quarter; Zara's parent company spent 100 million euros to purchase recyclable fabrics; Lingzhi China is expected to close all selected retail stores in China by July 31 this year. From May 16, Shanghai will gradually resume business and restore the city.
Investment suggestion: affected by the epidemic, clothing retail and export were under pressure in April. The superposition of local sports brands was affected by the high base of Xinjiang cotton last year, and the valuation of textile and clothing sector continued to fall back to the low level in the range of nearly two years. In May, the pressure on the base of sports brands gradually eased, Shanghai gradually resumed business and market, the devaluation of RMB, the price of sea freight and main raw materials were controlled, and the valuation of the sector was slightly repaired. We continue to be optimistic about the trend that the improvement of the epidemic will drive the recovery of consumer retail sales and the reduction of cost pressure will drive the improvement of the performance of manufacturing and export enterprises, and look forward to the arrival of the turning point of fundamentals and valuation under the background of historical low. 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 tips: 1. Repeated epidemic situation; 2. Deterioration of competition; 3. Damaged brand image; 4. The price of raw materials fluctuates greatly; 5. Systemic risk.
