Investment suggestion: in the first half of 2021, the consumption outside China recovered, and the downstream demand was strong, which led to the recovery of the downstream clothing and home textile sector. At the same time, the epidemic in Southeast Asia repeatedly led to the return of some orders and lifted the upstream textile manufacturing sector, with a strong overall recovery momentum. Since the second half of 2021, the overall performance of end consumption has been relatively weak. The rising cotton price has boosted the performance of upstream manufacturing enterprises, and the overall performance of textile manufacturing sector is better than that of clothing and home textile sector. It is suggested to pay attention to two main lines: 1) textile manufacturing: the orders of upstream manufacturing end are full, and the rising price of raw materials drives the increase of product prices, It is suggested to pay attention to the faucet Zhejiang Weixing Industrial Development Co.Ltd(002003) (002003. SZ) of medium and high-end accessories and the faucet Huali Industrial Group Company Limited(300979) (300979. SZ) of high-quality sports shoes; 2) Home textile: under the background of consumption upgrading, the average online sales price of home textile products has increased steadily, leading other sub industries of textile and clothing. Generation Z has gradually become the main force of consumption, with consumption concepts such as pleasing oneself and creating a high-quality life. The replacement frequency of home textiles has increased, and the medium and high-end home textile leaders are expected to benefit. It is suggested to pay attention to Luolai Lifestyle Technology Co.Ltd(002293) (002293. SZ) and Shenzhen Fuanna Bedding And Furnishing Co.Ltd(002327) (002327. SZ).
Market review: in December 2021, the Shanghai Composite Index rose 2.13%, the Shanghai and Shenzhen 300 rose 2.24%, and the textile and garment (Shenwan) index rose 1.61%, ranking 19th among the 28 primary industries of Shenwan. Among the secondary industries, the textile manufacturing (Shenwan) index rose 3.31%, and the clothing and home textile (Shenwan) index rose 1.27%.
Industry data tracking: 1) clothing and home textiles: from January to December, the total retail sales of social consumer goods was 44.08 trillion yuan, a year-on-year increase of 12.50%, of which the cumulative volume of clothing, shoes and hats was 1.38 trillion yuan, a year-on-year increase of 12.70%; In terms of online sales, in November 2021, the online sales of men’s wear, women’s wear, children’s wear, sports shoes and clothing and home textile increased by – 23.59%, – 12.05%, – 2.37%, 5.62% and 12.82% respectively year-on-year; In terms of export, the cumulative export amount of textile and clothing from January to December increased by 8.34% year-on-year, maintaining a single digit steady growth. 2) Textile manufacturing: as of December 31, 2021, China’s cotton price 328 index was 22107 yuan / ton, a month on month decrease of 437 yuan and a year-on-year increase of 7144 yuan; The cotlooka price index was 127.20 cents / pound, an increase of 4.15 cents month on month and 42.60 cents year-on-year. Affected by the decline of commodity market prices and the weakening of upstream textile demand, cotton prices fell somewhat.
Risk tip: the price of raw materials fluctuates, the industry competition intensifies, and the end consumption is less than expected.
