Main points:
From the perspective of Q2, we generally believe that the opportunities of downstream brands are better than those of upstream manufacturing. (1) Q2 at the manufacturing end may be worse than Q1 month on month under the background of overseas order outflow and China’s order delay, but combined with depreciation factors, the profit end is expected to remain stable. The segments with high proportion of overseas layout and no carrying capacity in Vietnam are preferred, and Zhejiang Natural Outdoor Goods Inc(605080) , Zhejiang Jasan Holding Group Co.Ltd(603558) , Zhejiang Jasan Holding Group Co.Ltd(603558) ; (2) With the improvement of the epidemic situation in Shanghai, the garment sector is expected to usher in the opportunity of valuation and repair. It is recommended that Baoxiniao Holding Co.Ltd(002154) ; (3) Target of growth track and less affected by economic slowdown: Comefly Outdoor Co.Ltd(603908) , although the company has increased to some extent, we judge that the interim report and annual performance of the company are still possible to exceed expectations.
This week, we released Toread Holdings Group Co.Ltd(300005) in-depth report: in the short term, due to the impact of the company’s Tianjin epidemic, the delivery of outdoor equipment in 22q1 has only increased in double digits, but it has shown high growth since Q2: according to magic mirror data, the company’s sales have increased significantly in the near future. In the medium and long term, the main business of shoes and clothing is expected to restart after the epidemic, and there is room for superposition of store efficiency + discount deposit. In addition, the company’s acquisition of 60% equity of Beijing core energy is expected to create a second growth curve. Beijing core energy promises to achieve a net profit of no less than 0 yuan / 859745 million yuan / 172 million yuan in 2022 / 2023 / 2024 respectively. We believe that Beijing core energy has certain technical advantages and the company’s production expansion plan is clear. With the release of chips driven by the high boom in the downstream, it will help the company digest new production capacity and enhance the possibility of fulfilling performance commitments. It is estimated that the revenue in 2022 / 23 / 24 will be RMB 1.54/20.51/2.617 billion respectively, the net profit attributable to the parent company will be RMB 0.74/174257 million respectively, the EPS will be RMB 0.08/0.2/0.29 respectively, the closing price on May 17, 2022 will be RMB 8.14, and the corresponding PE will be 97 / 41 / 28x respectively. It will be covered for the first time and given the “overweight” rating.
Market review: outperformed the Shanghai Composite Index by 1.44pct, and the outdoor industry chain increased significantly
This week, the Shanghai Composite Index rose by 2.02%, the gem index rose by 2.51%, the SW textile and garment sector rose by 3.46%, outperforming the Shanghai Composite Index by 1.44pct and the gem index by 0.95pct, of which the SW textile manufacturing rose by 2.91% and the SW clothing and home textile rose by 3.71%. At present, the PE of SW textile and garment industry is 19.89. This week, e-commerce performed best, with an increase of 7.98%; In outdoor sports, Toread Holdings Group Co.Ltd(300005) / Beijing Sanfo Outdoor Products Co.Ltd(002780) / Comefly Outdoor Co.Ltd(603908) increased by 35% / 23% / 16% respectively.
Market data tracking: China’s cotton price index fell 1% this week
As of May 20, China’s cotton 328 index was 22105 yuan / ton, down 1% this week. As of May 20, China’s imported cotton price index (1% tariff) was 25642 yuan / ton, down 0.826% this week. As of May 19, the closing price of cotlooka index (1% tariff) was 25517 yuan / ton, down 0.73% this week. On the whole, the price difference of cotton inside and outside this week was 3537 yuan / ton, an increase of 439 yuan / ton compared with last weekend.
In April 2022, China’s retail sales of social consumer goods totaled 2948.3 billion yuan, a year-on-year decrease of 11.07% and a cumulative year-on-year decrease of 0.17%. The total retail sales of clothing, shoes and hats, knitwear and textiles in April was 79.1 billion yuan, a year-on-year decrease of 23% and a cumulative year-on-year decrease of 6%.
In the first April of 2022, China’s online retail sales increased by 3.3% year-on-year, down 3.3pct from January to March; Among them, the national online retail sales of physical goods increased by 5.2% year-on-year, 3.6pct slower than that from January to March, accounting for 23.8% of the total retail sales of social consumer goods; In the online retail sales of physical goods, food and use goods increased by 12.9% and 6.3% respectively, and clothing decreased by 1.7%.
According to the statistics of the General Administration of customs, in April 2022, the export amount of clothing and clothing accessories was US $11.332 billion, a year-on-year increase of 1.87%; The cumulative growth in the first four months was 6.2%. In April 2022, the export value of textile yarn, fabrics and products was US $12.26 billion, a year-on-year increase of 0.86%; The cumulative growth in the first four months was 11.06%.
Risk tips
The epidemic broke out again; Fluctuation risk of raw materials; Systemic risk.
