Clothing Industry Consumption Has Been Recorded For The First Time In Many Years, Will It Usher In A Revival In The Second Half?

In mid May, the National Bureau of statistics released the retail sales statistics of consumer goods this year.

Data show that in April, China's total retail sales of consumer goods totaled 30586 billion yuan, up by 7.2% over the same period.

Among them, clothing, shoes and hats, needle and textile products consumption performance was poor, an increase of -1.1% over the same period, the first decline in recent years.

In fact, affected by the macroeconomic environment, domestic clothing consumption has been showing a downward trend since the second half of last year, and the first decline in April over the years.

Some analysts pointed out that the decline of clothing in April was mainly due to three reasons:

First, the holiday in April decreased by two days compared with the same period last year (last year's May Day holiday was two at the end of April), and there was a lack of small holiday consumption in April this year.

Two, falling is in line with the overall trend in the past year.

From the first quarter of last year, the consumption growth rate of clothing industry has declined from a high level, and its growth rate remained at a relatively high level of 8.8% in 4 last April.

Three, the whole country is late in summer this year, so the sales of summer wear in April is not ideal.

The situation is expected to improve in May.

In the first four months of this year, the consumption of clothing industry increased by 2.2% year-on-year, indicating that the industry is still at a stable stage of development.

Bottom recovery in the second half?

However, a few big brokerages agreed that due to the advent of the "four day" small golden week this year, the clothing consumption data in May will rebound compared with April.

In the second half of this year, clothing market consumption will also recover in the second half of this year.

Hua Xiaowei and Shi Kun, a CITIC investment analyst, said that because this Labor Day holiday is more than usual for more than one day, and is concentrated in May, it is expected that May clothing consumption will rebound compared with April.

As for the whole year, the consumption performance of clothing industry in April of this year is also consistent with the previous low and high expectations.

Zhang Junhao, an analyst with Guoxin Securities, expects that the fundamentals will accelerate recovery in the second quarter of this year, thanks to favorable policies such as promotion consumption policy, tax reduction and other favorable policies and the "May 1" holiday promotion.

Tianfeng securities analyst Lv Ming and Guo Bin believe that with the 18 year May after the base will gradually reduce, the second quarter of this year, social retail clothing consumption will continue to appear marginal improvement.

In the future, as the consumption environment is stable and the high base effect decreases, the fundamentals will maintain marginal improvement.

What companies do securities companies look for?

According to the 2018 clothing industry research report, last year, men's clothing brand enterprises in men's clothing industry have obvious advantages in the industry segmentation market. Women's wear brands in women's clothing industry are generally stronger in anti risk ability, and children's wear industry is benefiting from the second child policy, the market is expanding rapidly, children's clothing demand is increasing, and the market development space is wide.

In recent years, the compound annual growth rate of domestic sports and casual wear market has remained at around 30%.

In recent years, with the "National Fitness Program" and other policies put forward, the sports market matures, and consumers' demand for professional sports products is gradually increasing.

In addition, the research also indicated that clothing enterprises with advanced equipment, strong R & D capability, high technology level and perfect supply chain have stronger risk resisting ability, while the credit level of leading enterprises is even higher.

CITIC Securities said that from the perspective of segmentation industry, it is now optimistic about the two sub sectors of children's clothing and sports, which are the first ones to emerge.

According to the characteristics of the industry, the leading companies in the three major segments of the Chinese garment industry are probably the earliest sports and children's wear industry, followed by the mass leisure industry, and finally the high-end / personalized brand group.

CITIC construction has similar views, saying that the children's clothing market focuses on quality, while the sportswear market attaches importance to functions, which can form a higher brand premium. It is recommended to pay attention to Semir clothing and Anta in the industry.

In addition, the middle and high-end brands have a better landing and stronger risk resistant companies, such as the brand of golf and fashion, etc.

Tianfeng Securities said that with the improvement of the overall consumption environment in the second quarter of this year, the performance inflection companies will show more profit elasticity in the second half of the year. In the short term, the clothing industry can focus on two types of Companies:

(1) companies that are less affected by the economic cycle and have stable performance;

(2) at present, valuations are in a historical position and there are fewer downside risks.

Specifically, the relevant brands of sports apparel industry have maintained rapid growth at present, in line with the current trend of clothing consumption.

In addition, companies such as 300577.SZ, 002127.SZ and so on, which are "selling new products with high quality and cost effective", have maintained steady growth. The leading industries such as Semir clothing, Hai Lan home, and song and so on are all at a low level; the 19 years of apparel industry that are expected to turn out the inflection point of their performance, such as Meng Jie and Mei Bang dress, are all concerned.

Some of the company profiles are as follows:

Semir clothing (002563.SZ): main series of adult casual wear and children's clothing, the main products include Semir and balbala two series.

Balbala brand is the largest brand of children's clothing in China, and Semir is the second largest leisure apparel brand in China.

19 in the first quarter, the company gained 4 billion 118 million of revenue, an increase of 63.90% over the same period, and a net profit of 347 million to the parent company, an increase of 11.06% over the same period last year.

Anta (02020.HK): mainly engaged in the production and sale of sporting goods, such as footwear, clothing, accessories, etc. its brands include "Anta", "Anta children", "FILA", "FILA KIDS" and "NBA" brand.

Last year, the company gained 24 billion 100 million yuan in revenue, an increase of 44.38% over the same period last year, and a net profit of 4 billion 100 million yuan, an increase of 32.87% over the same period last year.

603808.SH: main design, development, production and sales of women's clothing.

The company was founded in Shenzhen in 1996.

In the first quarter of 19, the company achieved a revenue of 623 million yuan, an increase of 8.32%, and a net profit of 89 million 160 thousand yuan, an increase of 11%. The first quarter of this year, the company's performance was higher than the outside expectations.

Hai Lan home (600398.SH): large garment enterprises, covering the brand clothing business, high-end worsted fabrics, high-end suits, professional wear production and sales.

Sales revenue from clothing products accounted for over 70% of the company's annual revenue.

In 2018, the company achieved 190.9 revenue, an increase of 4.89% over the same period, and a net profit of 3 billion 455 million, an increase of 3.78% over the same period last year.

In the fourth quarter of last year, the growth rate of the company's revenue side picked up.

603839.SH: domestic multi brand fashion enterprises are engaged in garment research and development, production, sales and brand management.

The company's brand includes "nine posture", "Yin Mo", "an Zheng" and so on. The products include women's fashion, suits, trousers, shirts, jackets and so on.

In the first quarter of this year, the company gained 553 million revenue, an increase of 41.46% over the same period, and a net profit of 102 million, an increase of 10.51% over the same period last year.