The Stock Market Has Come To The End Of The Recession.

Recently, the brand of Hong Kong stock

There is a situation that many investors have never anticipated: the collective performance of the earnings data is beautiful, while the wave of the stock market's eye-catching performance has come to a deeper callback.

Including 1234.HK,

(2298.HK) and CABBEEN (2030.HK) last year to the first half of this year (at least in the first quarter) stock price performance brisk brand clothing company, in the second half of this year, stock prices have dropped significantly.

Among them, at least two net profit growth in the first half of 2018 was around 25%, and the performance was not too bad.

What led to these?

What did the company's share price go up before, and what kept them frustrated in the good news?

Looking at the Hong Kong Stock clothing companies listed on the stock market soaring before the current setback, we will find that many companies can not do without three key factors: low valuation, continuous big buy back and performance rebound.

It can be said that after a long period of weakness, the buyback movement has started the local bull market of the Hong Kong Stock clothing companies, and the recovery of their performance may be a deep-seated cause.

The question is whether these companies have reached the end of the battle when the external environment suddenly changes and the warmer expectations have been fulfilled. Can the effectiveness of the repurchase become effective again?

Previous review: the bull market started from the first quarter of 2017 to the first half of 2018. The number of representative brand clothing companies listed on Hong Kong stock market has gone up quite a bit.

In addition to the new listing in 2016

In addition, four other companies had quite frequent repurchase actions in 2017.

The share price reached a high level in the first half of the year, and it was significantly callback in the near future.

Observing the stock price charts of different companies, it is obvious that it is the Mavericks that started the round of repurchase.

Buy back is an important signal to grasp market changes ahead of time, especially when many companies in the industry begin to buy back at the same time.

From August 2017 to December 2017,

The 5 buyback of the company's stock is about 73 million Hong Kong dollars.

Subsequently, its share price continued to rise, the largest increase of more than 120%, until the second half of this year began to usher in a depth adjustment.

The following is the company's share price chart:

From January 16, 2018 to January 19, 2018, urban beauty bought back shares for 4 consecutive trading days, and the repurchase amount was about 14 million 520 thousand Hong Kong dollars. Its share price rose by 80% over the next 4 months, until the recent adjustment.

The following is the company's share price chart:

From April 2017 to August 2017, CABBEEN continued to buy back shares at a low price, and the repurchase amount was about 107 million Hong Kong dollars.

Then the company's share price lingered for more than half a year, then it began to pull up in April 2018, and its share price rose more than 60% in two months, until the recent adjustment.

The following is the company's share price chart:

Giordano repurchased more frequently in 2017, and the buyback action is still ongoing. However, compared with other companies, Giordano's situation is relatively special, its overseas business share is higher, and it keeps a high dividend for a long time, closer to a bond, and it will not be discussed for the time being.

There is no doubt that the buyback spurred these companies' share prices to follow.

The underlying reason behind the repurchase is the divergence of performance and valuation.

After years of adjustment, some clothing companies have shown signs of improvement after 2017, and the growth in mid 2018 has been confirmed by financial data.

But unfortunately, the more beautiful performance has not boosted stock prices.

Mid term earnings growth and share price setbacks were frustrated. By the end of last week, three of the four garment companies that had bought collective repo had announced their latest performance.

However, after many companies reported their success, their share prices declined.

For example, China's mid term results were disclosed at noon on August 13th, and its profit increased by 25.89% to 341 million yuan over the same period. The growth rate was significantly improved. The company's share price fell by more than 18% on the day of performance disclosure and the next two trading days.

CABBEEN announced its interim results in August 10th, and its profits resumed growth. However, the company's share price has fallen by more than 10% so far.

Giordano's share price is also unsatisfactory.

It fell nearly 10% in July and down more than 5% in August.

In August, after the announcement of the performance, the company restarted the buyback, and the share price had not yet risen.

Why is this happening?

There are some well-known reasons, such as the depreciation of RMB.

In the first quarter of this year, the yuan began to depreciate considerably, and the depreciation rate against the US dollar once exceeded 9%.

In addition to Giordano, the above apparel companies earn a large proportion of their income from the domestic market, mainly in Renminbi.

Even without considering the impact of devaluation on the business level, it is enough to suppress stock prices: stock prices are denominated in Hong Kong dollars, and investors naturally want to convert the profits of the renminbi into Hong Kong dollars to revaluate the company.

This effect is not limited to the clothing industry. The income of Hong Kong stocks mainly comes from the mainland. The Renminbi denominated companies will encounter such problems, even if the Tencent will be similarly affected.

However, if we look at the decline in share prices, a simple depreciation of the renminbi will not explain such a sharp decline.

Is the market expected to be unsustainable in the garment industry?

Has the brand clothing industry really recovered? After nearly 7 years of industry adjustment and capacity clearance, the apparel industry finally welcomed a spring breeze in the second half of 2017.

According to the National Bureau of statistics, after 2011, the clothing sales volume above the limit showed a downward trend year-on-year growth. After years of industry adjustment and inventory, statistics began to stabilize.

In August 2017, apparel retail sales grew by a year earlier than the same period last year, and growth rates began to pick up.

In the first half of this year, the growth rate of clothing sales above the limit was positive, and in addition to 4 and 5 months, the growth rate of clothing sales in other months was higher than that in the same period last year.

The following are the changes in year-on-year growth in clothing sales above the quota based on data from the National Bureau of statistics.

However, the above increase seems to be open to question.

From the above statistics, the retail sales of clothing category above the limit indicated by the National Bureau of statistics, the retail sales of clothing in the first half of 2018 have been significantly lower than that of the same period last year. The retail sales in 5-7 months have even been significantly lower than those in 2016.

The following are the changes in clothing retail sales above the quota based on the data of the National Bureau of Statistics:

Compared with the same period last year, the value of the month has been significantly reduced compared with the same period last year. So contrary data, is the garment industry fully recovered or is it facing downside risks again?

These two statistics are all official. Why is there such a difference? Maybe it is because of the different caliber, there may be other unknowable factors.

The emphasis of this article is not on the art of statistics.

From the recent trend of Hong Kong Stock clothing industry, we can probably learn something new. Even if management is willing to buy shares of real gold and silver, it is difficult to change the macro environment and can not control investors' expectations.

The situation is stronger than man.

In the external economic environment and

When the expected direction changes come, hundreds of millions of repurchase or short-term performance rebound may be floating clouds.

Sailing against the wind is not easy.