Zero data of clothing and cosmetics agency in December: the total retail sales of social consumer goods in December 2021 increased by 1.7% year-on-year, narrowed by 2.2pct compared with the year-on-year growth in November, and increased by 12.5% year-on-year from January to December. Among them, clothing retail sales fell by 2.3% year-on-year in December, expanding by 1.8pct month on month compared with the decline in November, with a cumulative year-on-year increase of 12.7% from January to December; Retail sales of cosmetics increased by 2.5% year-on-year in December, slowing down by 5.7 PCT compared with November, and increased by 14.0% year-on-year from January to December.
Market review: textile and garment sector: last week (January 17 to January 21, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index rose or fell by + 0.04%, – 0.86% and + 1.11% respectively, and the textile and garment sector fell by 3.41%, ranking 26th among 31 Shenwan industries; Among them, the textile manufacturing sector fell 2.41%, and the clothing and home textile sector fell 4.02%. In the past month (from December 22, 2021 to January 21, 2022), the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index rose or fell by – 2.83%, – 4.49% and – 2.73% respectively, and the textile and garment sector fell by 2.59%, ranking 17th among the 31 Shenwan industries.
Cosmetics sector: the cosmetics sector fell 4.72% last week, underperforming the Shanghai and Shenzhen 300 index by 5.83pct. The cosmetics sector fell 20.71% in the past month, underperforming the Shanghai and Shenzhen 300 index by 17.98pct. Compared with 31 industries of shenwanyi level, the cosmetics sector ranked 30th in terms of rise and fall in the past week and 32nd in terms of rise and fall in the past month.
Industry news: in the third quarter of fiscal year 2022, the sales of comparable stores in the Chinese market increased by 15% year-on-year, and the sales of comparable positive price stores increased by 37% year-on-year; Prada’s sales rebounded to 3.364 billion euros in 2021, surpassing the pre epidemic level; Han Shu’s parent company, Shanghai Shangmei, submitted a prospectus to the Hong Kong Stock Exchange; Meili cultivation released the 2021 annual consumer insight report. In 2021, consumers still pay high attention to domestic brands; In 2022, most of the first batch of cosmetics submitted for efficacy claim evaluation only provided the evaluation method of moisturizing efficacy; Shanghai qianfeier was fined for adding the banned ingredient betamethasone to the product.
Investment suggestions:
1) textile and garment industry: from the social zero data, China’s consumption is still relatively weak, the epidemic situation in many cities continues to be severe, and the passenger flow and consumption intention will still be adversely affected. The upcoming winter Olympics will bring some positive catalysis. There is a clue in the performance forecast, and it is recommended to give priority to performance certainty. In the selection of individual stocks, we suggest paying attention to the continued prosperity of the track and the brand targets related to sportswear related to the Winter Olympics, and continue to recommend Anta sports, Li Ning, Tebu international and Biem.L.Fdlkk Garment Co.Ltd(002832) with high-end positioning; In the field of non sportswear, it is suggested to pay attention to the leaders of undervalued sub categories, including home textile Luolai Lifestyle Technology Co.Ltd(002293) and men’s wear Baoxiniao Holding Co.Ltd(002154) (hazzys, a sports fashion brand under its control). In terms of textile manufacturing, we continue to recommend Shenzhou International, Huali Industrial Group Company Limited(300979) , which has strong growth sustainability and a solid position as a high-quality head manufacturer.
2) cosmetics industry: the cosmetics industry maintains the previous view, and the short-term data is relatively flat. Under the circumstances of weak demand, stricter industry supervision, continued active entry of foreign brands and increasingly fierce competition, the differentiation trend of brands and companies will become more and more obvious. We believe that domestic brands should continue to build differentiated product power, tap subdivided demand, improve channel layout, keep up with market changes, innovate marketing and pay attention to brand construction, seize opportunities and attract young consumers under the favorable background of the rise of domestic products. We continue to recommend Proya Cosmetics Co.Ltd(603605) which actively improves the product power, has strong operation ability, has formed a clear strategic layout of multiple large single product series, multiple categories and multiple brands, has high performance growth, has a stable position as a subdivision leader, actively expands new categories and effects, and actively increases brand investment to improve influence.
Risk tip: the macroeconomic growth rate is down, and the terminal consumption is weak due to repeated epidemics or extreme weather, which affects the consumption demand of clothing, cosmetics and other products; The intensification of industry competition and the price war of foreign leading brands will have an adverse impact on China’s benchmark brands; E-commerce platform traffic growth slowed down and traffic costs increased.
