Two Major Trends Of Slowing Down Of Manufacturers' Move Out Of Mainland China In 2020

The latest changes in the textile and shoemaking industry have been identified in the UBS Evidence Lab. Two major trends have been pointed out: sports function goods are popular, and the manufacturers will move out of the mainland in 2020 to slow down. Another consideration is that Nike earnings are better than expected. Foreign investors are most optimistic about Fengtai (9910) and Confucian Hong Kong (1476). In contrast, UBS first brought together Yang (1477) into the research area, because it failed to catch up with the trend of sportswear, and gave the "sell" investment rating.

Chen Minjin, a non technology industry analyst at UBS, points out that there are two major trends in the latest research results of UBS observatory. First of all, although the consumption status of the US, Europe and the mainland in 2020 is not optimistic, the demand for sportswear clothing is still strong, and the market share is continuously grabbed from other clothing choices. In 2020, the apparel manufacturers who have a relatively high proportion of revenue in the field are expected to maintain growth. Taiwan supply chain such as: Fung Tai, and Ru Hong from sports shoes and related commodities account for more than 70%.

In contrast, UBS's US research team held a conservative view of US consumer budget expenditure. UBS observation index also showed that the budget expenditure in the next three months is slowing down. Only sports functional clothing is an exception that is not affected, and general clothing is also subject to conservative spending.

Poly Yang has 78% of its revenue from the United States, and 73% of its products are related to non sports apparel. UBS believes that jyang will obviously be influenced by consumer spending conservatively. In 2020, battalion movement will be weak, and the price will be increased or the gross profit margin will be increased. UBS gives Jo Yang's speculation that the stock price is only 145 yuan.

According to the foreign investment estimate, the net profit per year in the 2019~2021 years is 8.08, 8.16 and 8.81 yuan. Analysts pointed out that even if the current stock prices do not seem to be high, but the profit kinetic energy is weakening, the current earnings ratio is as high as 21 times.

　　 The second trend of textile and shoemaking industry is The United States has imposed a 15% tariff on sports apparel and footwear products exported to the mainland. Brand factories do continue to seek opportunities outside the mainland to reduce the cost pressure. However, manufacturers of local factories in mainland China are likely to adopt self absorption cost strategy to leave orders. That is to say, the momentum of orders related to manufacturers outside mainland China is expected to slow down 2020. It seems that poly Yang originally benefited from the redistribution of orders, and it may become more unfavorable next. Unit prices and gross margins will be compressed.