Report summary:
This week, we released Wuhu Fuchun Dye And Weave Co.Ltd(605189) in-depth report. Looking forward to the future, the company has projects that can support capacity expansion in the next 4-5 years. We estimate that the company’s revenue / profit is expected to maintain 28% / 23% CAGR to RMB 5.818/518 billion from 2021 to 2025. From the perspective of downstream customers, the traditional customer socks factory is expected to grow steadily. At the same time, the company expands towel, home textile, knitting and other categories. It is estimated that the revenue from 2021 to 2023 will be RMB 2.188/2.809/3.856 billion respectively, and the net profit attributable to the parent will be RMB 225/2.47/339 million respectively. It is rated as “buy”. The target market value is RMB 4.45 billion and the corresponding target price is RMB 35.65 (corresponding to 18x in 22 years).
At the current time point, we mainly recommend Baoxiniao Holding Co.Ltd(002154) , Comefly Outdoor Co.Ltd(603908) , Bros Eastern Co.Ltd(601339) : (1) the target with extended store space, Baoxiniao Holding Co.Ltd(002154) : 1) the main brand has increased store opening efforts in the central region by creating sports suits and broadening application scenarios, maintaining a growth rate of more than 15%, higher than that of the industry; 2) Hazys: on the basis of high efficiency, the brand still has extension shop space; In addition, the brand still has the logic of expanding categories such as shoes, bags and golf series, which is expected to maintain an increase of more than 25% in the future; 3) BAONIAO is expected to maintain a growth rate of more than 10%, and usher in an improvement in net interest rate with the commissioning of Hefei factory; 4) Small brands zhonglefeiye and kemiche are expected to maintain an increase of more than 35% and gradually contribute to profits.
(2) for the target of high view track, Comefly Outdoor Co.Ltd(603908) : 1) there are sufficient export orders and it is expected to grow steadily in the future; 2) Domestic business benefited from the policy of superposition and double reduction of epidemic situation, driving the hot demand for camping. In the medium and long term, the proportion of domestic sales revenue is expected to exceed half in the future, and the superimposed net interest rate will be improved to 15% +.
(3) the performance is expected to exceed the expected varieties, Bros Eastern Co.Ltd(601339) : according to our analysis, the capacity utilization rate of Blum Vietnam plant has recovered to 90% in November. Considering the company’s ability to raise the price under the rise of cotton price, the annual performance may exceed the expectation. Blum’s Chinese factories are mainly located in Yuyao and Zhenhai, Ningbo, Huai’an, Jiangsu, Zoucheng, Shandong, Hebei and other places (a total of 700000 ingots), and the orders of Ningbo factories can be transferred to other areas. According to our analysis, the Beilun epidemic has little impact on Bros Eastern Co.Ltd(601339) .
Market review: outperforming the Shanghai Composite Index by 1.83pct
This week, the Shanghai Composite Index fell 1.63%, the gem index rose 0.73%, and the SW textile and garment sector rose 0.20%, outperforming the Shanghai Composite Index by 1.83pct and losing the gem index by 0.53pct. Among them, SW textile manufacturing increased by 2.86%, and SW clothing and home textile decreased by 1.12%. At present, the PE of SW textile and garment industry is 19.64. This week, mothers, infants and children performed best, with an increase of 7.97%; E-commerce performed the worst, down 3.67%.
Market data tracking: China’s cotton price index rose 0.57% this week. As of January 14, China’s cotton 328 index was 22460 yuan / ton, up 0.57% this week. As of January 14, China’s imported cotton price index (1% tariff) was 20778 yuan / ton, up 1.68% this week. As of January 13, the closing price of cotlooka index (1% tariff) was 20071 yuan / ton, up 2.04% this week. On the whole, the cotton price difference between inside and outside this week was 16821898 yuan / ton, a decrease of 216 yuan / ton compared with last weekend.
Risk tips
Second outbreak of the epidemic; Fluctuation risk of raw materials; Systemic risk.
