Investment Strategy For Textile, Clothing And Retailing Industry In The Second Half Of 2018

The industry fundamentals return to the boom and upward cycle, underestimating the investment opportunities of the textile and garment retail sector.

1) since the beginning of 18, the spinning and clothing sector and the retail sector have performed well.

By the end of 18 June 14th, the textile and garment sector relative to Shen Wan A was -0.5%, ranked eleventh in the whole industry, and the retail trade sector was 1.7% compared to Shen Wan A, ranking ninth in the whole industry.

2) the 18 year is expected to rebound.

In 16 and 17, the relative profits of the spinning and weaving and retail sectors were bigger than those of the retail sector.

In the past 18 years, the industry fundamentals have returned to prosperity. We hope that the timing of deployment will come again.

With the revival of mass consumption and the revival of retail terminals, the "behind poverty alleviation + shed change and high monetization + real estate wealth effect" helps boost.

1) the demand for three or four line cities is improving, and the consumption of "town youth" is vigorous.

Under the impetus of precision poverty alleviation, shed reform and monetization and property wealth effect, the rural poor population has decreased by 68 million 530 thousand people since 2012, and per capita disposable income has doubled.

The consumption intention and consumption level of the three or four line urban residents have been significantly improved, which effectively boosted the overall public consumption recovery.

2) optimistic about the continuation of mass consumption trend.

In May 18, the total volume of social zero increased by 8.5% compared with the same period last year, mainly due to the delay in the Dragon Boat Festival compared with last year. In June, the retail sales data is expected to pick up.

3) online retail continues to grow at a high level.

In 18, 1-5, online retail sales grew by 30% year-on-year, and online retail sales accounted for 16.6% of the total retail sales.

Retail channel analysis: Shopping Center trend is obvious, further emphasis on online and offline collaboration.

1) shopping center: leading to speed up channel sinking and nuggets three or four line market.

Take Wanda as an example, the 18 year plan adds 52 Wanda Plaza, of which the number of stores in three or four line cities accounts for 2/3 of the total number of new stores.

2) department stores: department store shopping center, experience type business share increased.

Department stores continue to adjust and upgrade, introducing a large number of experience formats to cater to the changes in consumption habits brought about by the upgrading of consumption.

3) supermarkets: the dominance of foreign supermarkets weakened, and the differentiation of domestic supermarkets became more apparent.

Traditional stores are relatively backward, and foreign brands are frequently closed.

The growth rate of domestic supermarket stores is polarized, the stronger the stronger.

4) electricity supplier: the giant accelerates under the busy line and competed for the new retail battlefield.

Data and technology empowerment line enterprises, from Ali and Tencent layout competition for the view, the giants are to offline layout format, while accelerating the channel sink, for the low line city consumption new blue ocean.

5) suggestions: Wangfujing (Strategic Transformation shopping center), Tianhong shares (undervalued department store) and suning.com (online and offline leading smart retailing).

Textile and retail sector valuation is still low, leading companies are expected to stand out and propose to pay attention to the "town youth" portfolio.

1) horizontal comparison valuation has the margin of safety: compared with the leading level of consumer goods, there is still room for improvement in the valuation premium of clothing leading white horse.

2) pay attention to the leading companies vertically: comparing the historical valuation changes of GAP, the valuation system of overseas garment companies pays more attention to the growth of revenue, and the moat of business management should get a higher valuation premium.

Compared to A shares, the quality of the company's internal strength improvement, a new round of inventory cycle helps Matthew effect appears, is expected to synchronously push up performance and valuation.

Recommend the "town youth" combination that benefits from the revival of mass consumption in low level cities: a) clothing home textiles: Hai Lan's home, mercury home textiles; b) cosmetics: C, gold jewelry: Zhou Dasheng, len Shen channeling; d) retail business: focus on spelling and volume expansion and cash flow related investment opportunities.

Brand: channel environment optimization, the stronger the leader.

1) optimize the retail environment.

Driven by the upgrading of consumption, consumers' demand for quality building and brand identification is enhanced, and the leading companies occupy more shares.

2) adjust the garment industry to the bottom.

In the 16 and 17 years, the inventory of industry has been continuously digested, and the location of terminal stores has been adjusted and optimized.

3) leading enterprises build multi brand management groups.

The expansion of category development and the operation of multi brand brands have increased the coverage of customers. The quality leaders have steadily promoted overseas expansion plans and built up international brands.

4) suggest: Sea LAN home (underestimate white horse), Be Meleven (endogenous growth certainty), Taiping bird (emerging channel layout leading card), mercury home textiles (infiltrating low level city), Semir clothing (children's wear faucet).

Cosmetics & Gold Jewelry: deep plowing three or four cities, the influence is rising.

1) cosmetics: Yan value economy burst, track quality.

In the long run, consumption upgrading and collaborative e-commerce channel will drive the development of the industry. The horizontal contrast space is still huge. In the short term, under the background of Yan value economy, the online marketing + social media KOL word of mouth communication will help.

Sustained expansion.

2) gold and Jewellery: low line demand bursts, and there is room for growth.

Channel expansion continues to speed up, actively sinking low line cities, enjoying public consumption dividends, and the future growth can be expected.

It is suggested that attention should be paid to pariah, royal family, Zhou Dasheng and Lai Shen.