Core view
Market review: throughout the week, the CSI 300 index rose 2.23%, the gem index rose 2.51%, and the textile and garment industry index rose 2.92%, better than the CSI 300 and the gem index. Among them, the textile manufacturing sector rose 2.44%, and the brand clothing sector rose 3.37%. In terms of individual stocks, Bosideng, Zhejiang Natural Outdoor Goods Inc(605080) and Zhejiang Weixing Industrial Development Co.Ltd(002003) we covered have achieved positive returns.
Overseas highlights: (1) Walmart’s performance was lower than expected. (2) Retail sales in Hong Kong fell 13.8% in March. (3) Target target’s performance in the first quarter was lower than expected.
Important information of the industry and the company: (1) Zhejiang Semir Garment Co.Ltd(002563) : Chairman Qiu Guanghe lifted the pledge of 120 million shares. As of today, Qiu Guanghe has pledged 99.5 million shares, accounting for 23.3% of his total shares. (2) Biem.L.Fdlkk Garment Co.Ltd(002832) : the company uses idle self owned funds to purchase financial products, with an amount of 200 million yuan. The holding period is from May 19, 2022 to November 19, 2022, and the expected annualized interest rate is 1.8% ~ 3.22%. (3) Investment and financing of consumer industry from May 14 to May 20: a. Pinyan, a brand of home technology beauty care, completed Angel round financing; B top favor, a trendy children’s wear brand, has completed two rounds of financing in a row; C. Lotto technology, a digital fitness service provider, completed an angel round of financing of 18 million yuan.
Suggested sector combination this week: Zhejiang Weixing Industrial Development Co.Ltd(002003) , Huali Industrial Group Company Limited(300979) , Anta sports, Li Ning and Zhejiang Natural Outdoor Goods Inc(605080) . Last week’s portfolio performance: Zhejiang Weixing Industrial Development Co.Ltd(002003) 8%, Huali Industrial Group Company Limited(300979) 4%, Anta Sports – 1%, Li Ning 4% and Zhejiang Natural Outdoor Goods Inc(605080) 8%.
Investment proposal and investment object
On Monday, the Bureau of statistics disclosed the social zero data in April. In April, China’s total retail sales of social consumer goods decreased by 11.1% year-on-year, and the retail sales of consumer goods other than cars decreased by 8.4%. Due to the impact of the epidemic, the growth rate was significantly lower than that in March. From January to April, the online retail of physical goods increased by 5.2% year-on-year, of which the wearing goods decreased by 1.7%. From the perspective of structure, the stronger consumer goods in April are still grain, oil, food, beverage and other necessary consumer goods. Among the optional consumer goods we covered, gold, silver and jewelry decreased by 26.7% year-on-year in April (the proportion offline is high and more vulnerable to the epidemic), and cosmetics, clothing, shoes and hats decreased by 22.3% and 22.8% year-on-year. In the short term, the progress of China’s epidemic situation is still the main variable affecting optional consumption. As the epidemic situation in Shanghai and other provinces and cities begins to ease, it is expected that local policies will gradually increase their support for consumption and the real economy, superimposing the increased marketing investment of various brands and e-commerce platforms in the second quarter (618 promotion, etc.), which is expected to lay the bottom of optional consumption in the second quarter. With the recent devaluation of the RMB against the US dollar, the export manufacturing sector remains hot. We believe that some textile manufacturing leaders with good fundamentals (obvious global comprehensive competitiveness + relatively stable external demand + expectation of RMB devaluation) are still one of the hot spots in the industry and the main allocation directions of excess income sources. Downstream brand leaders as a whole are in the stage of waiting for data improvement and verification, focusing more on structural opportunities. In the long run, we continue to be optimistic about the high prosperity of sportswear and big beauty (cosmetics and medical beauty). Among them, the sportswear sector recommends Li Ning (02331, buy), Anta sports (02020, buy), Huali Industrial Group Company Limited(300979) ( Huali Industrial Group Company Limited(300979) , buy) and Shenzhou International (02313, buy). It is suggested to pay attention to Tebu International (01368, buy). The big beauty sector is optimistic about Proya Cosmetics Co.Ltd(603605) ( Proya Cosmetics Co.Ltd(603605) , buy) in the medium and long term Imeik Technology Development Co.Ltd(300896) ( Imeik Technology Development Co.Ltd(300896) , buy) and Yunnan Botanee Bio-Technology Group Co.Ltd(300957) ( Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , overweight), it is suggested to pay attention to Shanghai Jahwa United Co.Ltd(600315) ( Shanghai Jahwa United Co.Ltd(600315) , overweight), Bloomage Biotechnology Corporation Limited(688363) ( Bloomage Biotechnology Corporation Limited(688363) , Unrated). The traditional clothing sector recommends Zhejiang Weixing Industrial Development Co.Ltd(002003) ( Zhejiang Weixing Industrial Development Co.Ltd(002003) , buy), Baoxiniao Holding Co.Ltd(002154) ( Baoxiniao Holding Co.Ltd(002154) , buy), Bosideng (03998, buy), Zhejiang Natural Outdoor Goods Inc(605080) ( Zhejiang Natural Outdoor Goods Inc(605080) , buy), Luolai Lifestyle Technology Co.Ltd(002293) ( Luolai Lifestyle Technology Co.Ltd(002293) , overweight), etc. In addition, it is suggested to pay attention to Biem.L.Fdlkk Garment Co.Ltd(002832) ( Biem.L.Fdlkk Garment Co.Ltd(002832) , not rated) and Comefly Outdoor Co.Ltd(603908) ( Comefly Outdoor Co.Ltd(603908) , not rated), etc.
Risk tips
The repeated outbreaks outside China, the pressure of economic slowdown on China’s retail terminals, trade friction, inflation and RMB exchange rate fluctuations
