Key investment points
The monthly rise of the consumer market slowed down and made steady progress throughout the year. On January 12, 2022, the National Bureau of statistics released the latest CPI (consumer price index). In December 2021, CPI was + 1.5% year-on-year, which was caused by the multi-point sporadic impact of the epidemic, with a month on month increase of -0.8pct, with an increase of 1.6% in cities and 1.2% in rural areas. Among them, the year-on-year increase of food prices from 1.6% last month to 1.2%, affecting the decline of CPI by about 0.22 percentage points. The price distribution of pork, fresh vegetables, freshwater fish, eggs and edible vegetable oil was – 36.7%, + 10.6%, + 16.7%, + 14.2% and + 9.0%, and the growth intensity was weakened. Non food prices rose by 2.1%, down 0.4 percentage points from the previous month, affecting the CPI rise by about 1.69 percentage points. Among non food products, the price of industrial consumer goods rose by 2.9% and fell by 1.0 percentage points, of which the prices of gasoline and diesel increased by 23.0% and 25.4% respectively, both of which fell significantly compared with the previous month; Service prices rose 1.5% and the rise was stable. In 2021, CPI rose by 0.9% year-on-year, lower than the regulation target of about 3% year-on-year increase. However, under the circumstances that the external environment is more complex, severe and uncertain, and there are still many constraints on China’s economic recovery, China’s price level is still in a relatively good operating state.
This week, the textile and garment sector outperformed the market by 1.58 PCT, Annil Co.Ltd(002875) , Comefly Outdoor Co.Ltd(603908) , Ribo Fashion Group Co.Ltd(603196) rose ahead. This week (01.10-01.14), SW textile and garment sector fell 0.4%, CSI 300 fell 1.98%, and textile and garment sector outperformed the market by 1.58pct. Among them, SW textile manufacturing sector increased by 0.03%, and SW clothing and home textile decreased by 0.79%. From the valuation level of the sector, the industry PE calculated by SW textile and garment overall method (TTM, excluding negative value) is 18.85 times, which is lower than the average value in recent one year. The top 5 companies in the textile and garment sector this week are: Annil Co.Ltd(002875) (+ 16.91%), Comefly Outdoor Co.Ltd(603908) (+ 16.75%), Ribo Fashion Group Co.Ltd(603196) (+ 13.13%), Huafu Fashion Co.Ltd(002042) (+ 12.73%) and Hangzhou Nbond Nowovens Co.Ltd(603238) (+ 11.85%); The top 5 companies in the textile and garment sector this week were st Bailong (- 14.66%), Shanghai Challenge Textile Co.Ltd(002486) (- 9.48%), Toread Holdings Group Co.Ltd(300005) (- 7.64%), Jinhong Fashion Group Co.Ltd(603518) (- 7.53%) and Anhui Korrun Co.Ltd(300577) (- 7.03%).
This week, the household goods sector lagged behind the market by 1.65 PCT, Guangdong Hotata Technology Group Co.Ltd(603848) , Zhejiang Walrus New Material Co.Ltd(003011) , Markor International Home Furnishings Co.Ltd(600337) rose ahead. This week (01.10-01.14), SW household goods sector fell 3.63%, CSI 300 fell 1.98%, and furniture sector outperformed the market by 1.65pct. From the valuation level of the sector, the industry PE calculated by the overall method of SW household products (TTM, excluding negative values) is 26.03 times and that of SW furniture is 24.15 times, which is lower than the average value in recent one year. The top 5 companies in the furniture sector this week are: Guangdong Hotata Technology Group Co.Ltd(603848) (+ 5.9%), Zhejiang Walrus New Material Co.Ltd(003011) (+ 5.19%), Markor International Home Furnishings Co.Ltd(600337) (+ 4.96%), A-Zenith Home Furnishings Co.Ltd(603389) (+ 2.66%) and Zoy Home Furnishing Co.Ltd(603709) (+ 2.36%); The furniture companies with the top five declines this week are: Zbom Home Collection Co.Ltd(603801) (- 11.68%), Goldenhome Living Co.Ltd(603180) (- 7.7%), Suofeiya Home Collection Co.Ltd(002572) (- 7.49%), Healthcare Co.Ltd(603313) (- 6.95%) and Xlinmen Furniture Co.Ltd(603008) (- 5.79%).
Important industry news:
\u3000\u30001. Temus, one of the top 100 Chinese garment companies with a revenue of more than 800 million last year, landed in a shares. Jiangsu Tamus Knitting Technology Co., Ltd. disclosed the listing announcement on the evening of January 9. The company’s shares will be listed on Shenzhen Stock Exchange on January 11. The stock is abbreviated as tamus and the stock code is 001234. Established in August 1992, temus has an annual output of 6000 tons of various knitted fabrics and 20 million pieces of knitted clothing. The company’s main business is the R & D, production and sales of knitted fabrics and knitted clothing. It mainly provides OEM processing services for well-known clothing brands such as decathlon, Zhejiang Semir Garment Co.Ltd(002563) , Quiksilver, kappa, Giordano, cotton era and so on. Its main products can be divided into sportswear, casual wear and children’s clothing. The operating revenue mainly comes from decathlon and Zhejiang Semir Garment Co.Ltd(002563) – the sales to decathlon account for about 56% of the current operating revenue, and the sales to Zhejiang Semir Garment Co.Ltd(002563) account for about 27% of the current operating revenue. From January to September 2021, temus realized an operating revenue of 653 million yuan, an increase of 28.11% over the same period of the previous year, According to the preliminary calculation of the company, the operating revenue of temus in 2021 is expected to be RMB 800 million to RMB 850 million, an increase of 15.35% to 22.56% over the same period of last year; The net profit attributable to the shareholders of the parent company is expected to be 96 million yuan to 106 million yuan, an increase of 17.06% to 29.25% over the same period of the previous year; After deducting non recurring profits and losses, the net profit attributable to the shareholders of the parent company is expected to be 90 million yuan to 100 million yuan, an increase of 17.36% to 30.40% over the same period of the previous year.
\u3000\u30002. Overseas cotton yarn prices soared, Chinese inventories fell and prices were raised. Last week, the international cotton futures rose. The transaction price of 10 mainstream brands of bazaar siro spinning second line was about 23000 yuan / ton (tax included), and 20 knitted yarns were about 27500 yuan / ton (tax included). The transaction price increased slightly by about 300-500 yuan / ton. The price of outer yarn rose with the rise of cotton futures price. Indian cotton soared to 128-135 cents / pound on January 3. A small number of spring and summer orders in China stimulated some weaving mills. Cotton yarn traders started to replenish the stock before the Spring Festival. The cotton yarn inventory of some textile enterprises decreased. Cotton mills with good working capital took the lead in raising the quotation by 300-500 yuan / ton, of which OE yarn increased slightly, high count yarn and combed yarn increased slightly, and the actual transaction price increased by 200-300 yuan / ton, except c32s In addition to some transactions of c40s conventional yarn, other yarn counts are weak. Some enterprises above Designated Size gradually consume low-cost raw materials. New cotton procurement has been started in 2021 / 22, and the spinning cost will also rise significantly. On the whole, the new year is approaching, the terminal goods in the spot market are actively prepared, there are few large orders, and there is no possibility of sharp rise for the time being, coupled with other constraints.
\u3000\u30003. Chow Tai Fook released the operation data for the fourth quarter of 2021, and the retail sales increased by 31.1% year-on-year. On January 11, Chow Tai Fook released the unaudited main business data of 21q4. Q4 retail sales increased by + 31.1% year-on-year, and the increase narrowed (Q3 + 55.8%, Q2 + 69.8%).
Among them, the retail value in China was + 38.8% year-on-year, accounting for 88.8%. The retail value in Hong Kong, Macao and other markets was – 8.7% year-on-year, accounting for 11.2%. In the quarter, the same store sales in China increased by 10.7%, and the same store sales distribution in Hong Kong / Macao was + 9.9% / + 27.9%, which was due to the stability of local consumption in Hong Kong and the recovery of tourist consumption in Macao. The growth performance of retail value of franchise mode is better than that of self operated stores. In this quarter, the retail value of franchise retail points increased significantly by 65.2% year-on-year, far exceeding the overall retail value by 31.1%, and its contribution to the retail value of Chow Tai Fook jewelry increased to 60% / + 9pct. China’s smart retail increased by 74.1% and sales volume + 87.7%. During the quarter, smart retail contributed 10.4% to the retail value in China, of which 3.6% came from the use of retail technology. In this quarter, the group opened 432 retail outlets in China. As of December 31, 2021, the group had a total of 5646 retail outlets.
Important announcement of the company: [Shenzhou International] voluntary announcement on the latest progress of epidemic prevention measures and partial resumption of production; [ Ningbo Peacebird Fashion Co.Ltd(603877) ] announcement on the progress of completing the change of share nature and the grant of rights and interests under the restricted stock incentive plan in 2021; [Chow Tai Fook] unaudited major operating data for the three months ended December 31, 2021; [ Biem.L.Fdlkk Garment Co.Ltd(002832) ] announcement on the change of shareholding ratio by more than 1% due to active reduction and passive dilution of controlling shareholders and persons acting in concert; [ Jinhong Fashion Group Co.Ltd(603518) ] announcement on the plan of centralized competitive reduction of shares by outgoing executives; [ Anzheng Fashion Group Co.Ltd(603839) ] announcement on the extension of shareholders’ share pledge; [ Chow Tai Seng Jewellery Company Limited(002867) ] announcement on the completion of the repurchase and cancellation of some restricted shares granted for the first time and reserved; [Tebu international] profit forecast and business operation in China in the fourth quarter of 2021.
Investment suggestion: for the clothing and home textile sector, it is suggested to pay attention to Anta sports, Li Ning, the sports clothing leaders with higher prosperity and better competition pattern, and the stocks with valuation and cost performance Hla Group Corp.Ltd(600398) , as well as the leaders of sub track Chow Tai Seng Jewellery Company Limited(002867) , Bosideng, Ningbo Peacebird Fashion Co.Ltd(603877) .
Risk tips: 1 Real estate sales did not meet expectations; 2. The epidemic situation in China continues to occur repeatedly; 3. Intensified brand competition; 4. Epidemic situation in Southeast Asia or affecting the capacity release of textile manufacturing industry; 5. Large fluctuations in exchange rates.
