Textile And Garment Industry Staged "Song Of Ice And Fire". How Does Boston Continue To Market Twice A Year?

1. In 2019, the market share of A share market was the bottom of the market, and the Hong Kong share index of textile and apparel significantly outperformed the market.

In 2019, the overall performance of the A share market was good, with the Shanghai composite index increasing by 22.3% throughout the year. According to the market performance of Shenyin Wanguo industry, the textile and apparel index lost the largest market in 2019, ranking the top of the major sectors.

Specifically, in 2019, Shenyang Wanguo electronic plate rose 73.77%, while food and beverage recorded an annual increase of 72.87%, while the textile and clothing index rose only 7.09% in 2019.

From the perspective of stocks, the submarine shares of the professional production of ocean diving equipment surged 400% in 2019, and the operator of women's shoes rose 338% by virtue of the net red business concept on Saturday, while the market performance of ST modern and La Natsu Bell was at the bottom of the industry, or more than 30%.

Compared with A shares, the Hong Kong stock textile clothing index has achieved a better market performance. From the market of textile and apparel market of Fu Road Securities, the Hong Kong stock textile and apparel sector rose 34.31% in 2019, which significantly outperformed the Hang Seng Index 9.07%.

Although the textile and clothing index of Hong Kong stocks has achieved good market performance, the performance of the Hong Kong stocks is very obvious, and a "song of ice and fire" has been staged. There are double or nearly doubled stocks such as Lining, Bosideng, Anta sports, and there are no shortage of stocks such as La Natsu Bell and 100 degrees.

Specifically, in 2019, Lining's shares rose 179.9%, Bosideng shares rose 96%, Anta sports shares rose 87.7%, while La Natsu Bell's shares fell 78.6%, urban beauty fell 58.3%, and the decline was also 53.3%.

In fact, the Hong Kong stock spinning and clothing index can win the big market mainly thanks to Lining, Bosideng, Anta sports and other large market capitalization leading enterprises out of the bull market.

Two, the rise of domestic goods, the Hong Kong share of the leading spa group, Bosideng twice a year market

In 2019, under the pressure of the macro-economy, the textile and garment industry is also facing great challenges. From the data point of view, the overall apparel industry zero data is slightly weaker, in 2019 1-11 months, clothing, knitted shoes and hat textiles increased by 3% year-on-year, compared with 18 years, the same period decreased by 5.1pct.

As a result of the double 11 influence, the clothing company's zero data margin has improved in November. Data show that in November 2019, the retail sales of clothing, knitted footwear and hat textiles increased by 4.6% over the same period in 2018, down by 0.9cpt compared with the same period in 2018, compared with 19 in October.

Although the whole industry is not optimistic, in recent years, some leading domestic brands have regained the momentum of rapid growth through the transformation and adjustment in the context of the steady slowdown in the overall retail sales of consumer goods, showing a good growth.

According to the latest quarterly operation, Anta's main brand and FILA brand have achieved double-digit and 50%-55% growth respectively, and Lining has achieved the growth of 30%-40%, and XTEP has achieved a growth rate of about 20%.

In addition to sports brand, Bosideng, which specializes in producing down garments, has achieved high growth through the strategic transformation of "focusing on the main channel, focusing on the main brand and shrinking diversification". Recently, Bosideng spread the news. Bosideng said that in the first 9 months of the fiscal year 2019/2020, the cumulative sales volume of the core brand of Bosideng increased by 30% over the same period last year, while the total retail sales of other brand down garments increased by 40% over the same period last year.

It is worth noting that since November 2019, the warm winter situation is obvious, and the market is not optimistic about the sales this winter. According to a survey, 2019 may be the second highest or third highest year recorded. Affected by the warm winter, even the UNIQLO library, which has continued to fight in China, has seen a decline in its performance. According to the first quarter earnings report released by UNIQLO parent company in 2020, the company's sales fell by 3.3% over the same period last year.

However, because of its continued dividend from the strategic transformation, Bosideng still achieved a relatively rapid growth in retail sales in the unfavorable market environment of warm winter. In addition, in 2019, "double 11" and "double 12", Bosideng's sales also took the lead in other brands, creating a miracle in the sales of Chinese local brands. Accordingly, the annual performance of Bosteng can be expected.

Data show that in 2019, the "double 11" day, Bosideng whole network sales exceeded 800 million yuan, the total channel sales exceeded 1 billion yuan, of which Tmall flagship store sales exceeded 650 million yuan, an increase of 58% over the same period; "double 12" Bosideng online sales exceeded 440 million yuan, Tmall flagship store single store sales won the first place in the Chinese clothing brand.

Unlike Lining, Anta and other sportswear collective explosion, Bosideng has a leading edge in the down garment industry. Judging from the stock price, Bosideng, once again doubled in 2018, once again doubled the market in 2019. By contrast, the price of foreign high-end down jacket brand Canada Goose rose by -17.11% in 2019, and Italy's fashion down jacket Moncler (Moncler) rose 38.58% last year.

From the performance point of view, Bosideng revenue in 2019 fiscal year, net profit to the parent respectively amounted to 103.84, 981 million yuan, an increase of 16.84% and 59.4% compared to the same period. In the first half of 2020 fiscal year (six months before September 30, 2019) revenue, net profit of 44.36 yuan, 343 million yuan, year-on-year growth rate 28.8%, 36.4%. According to the general forecast of brokers, Bosideng's revenue growth rate is 20-30% between 2019-2021 years.

In the first half of fiscal year 2020 (up to six months before September 29, 2019), Canada goose's operating income was 365 million Canadian dollars, an increase of 32.8% over the same period last year. Net profit was 31 million 200 thousand Canadian dollars, which was unchanged compared with the same period last year. According to the canadian goose chief financial officer, the company's sales growth in the next 3 years will slow to about 20% annually.

In the first half of 2019 (six months before the end of June 30, 2019), Moncler's total operating income was 570 million euros, an increase of 16% over the same period last year, with net profit of 71 million 310 thousand euros, an increase of 16% over the same period last year. The latest data show that in the first nine months of 2019, Moncler's total operating income was 995 million euros, up 12% over the same period last year. Huaxing capital expects that in the 2018-2021 years, the annual compound growth rate of Moncler sales is 11%, and the compound annual growth rate of pre tax profit is 12%.

Three. Bosideng's big moves in 2019, brand upgrading is recognized by the market.

Bosideng's "overall strategy of focusing on the main channel, focusing on the main brand and diversifying" was put forward in June 2018. At the beginning of 2019, when Bosideng changed its effectiveness, the group released an excellent performance of "Bosteng, which has made a breakthrough in the reform, and how to repeat it twice a year." the article points out that the upgrading and optimization of Bosideng brand has brought potential and explosive power to the company.

Sure enough, as the company's strategic transformation is further apparent, Bosideng has once again doubled its market share in 2019 after its 132.84% rise in 2018. 2019 is the second year of the strategic transformation of Bosideng. In this year, Bosideng's business moves continuously, and the company's brand, products and channels are constantly upgrading.

Bosideng became the only Chinese down garment brand in Milan fashion week in 2019, and further reshaped its brand image. During the fashion week, Bosideng's "star sky", "extremely cold" and "land long" products gained a lot of praise. Bosideng's brand influence has been improved.

At the same time, Bosideng signed the famous actress Yang Mi as a spokesperson for the designer. He also worked with international film stars, actor Tom, Johnson STELTON, and "Scarlett" Johnson, etc., to highlight the brand professionalism of Bosideng while enhancing the fashion sense of the product.

In terms of channels, Bosideng continues to optimize the channel structure, enhance the proportion of self owned stores, and increase the number of key stores in shopping centers and mainstream channels. At present, the number of shopping centers in Bosideng has reached double digits. It is estimated that the number of stores in the shopping center will reach 30% of the total number of channels in the next two years.

In addition, Bosideng reached a deep cooperation with Tmall, vip.com and other online platforms in 2019. Bosideng growth accelerated. According to the 2020 financial year report, the online income of the down garment business increased by 91.1% over the same period last year.

With the upgrading of brand potential, Bosideng's product prices are also rising, and products are becoming high-end. It is worth mentioning that Canada goose and Moncler are the main brands of down garments that cost more than 5000 yuan. With the entry of international luxury down garments into the Chinese market, Chinese consumers have improved their acceptance of high price down garments. At present, the majority of domestic down duty clothing manufacturers are positioned in the mass market below 2000 yuan, so the middle and high end down garments at 2000-5000 yuan price can be described as a sea blue market.

In the 2018-2019 fiscal year, the sales volume of products below Boston 1000 yuan decreased from 48% to 12%, and the sales of down garments products over 1800 yuan increased from 5% to 24%. Boston middle and high end down clothing is usually known as IP or international stage show. Young, fashionable and international feather clothing brand image is recognized by consumers.

The increase in product prices has led to the improvement of the company's profitability. 2018/2019 financial year, Bosideng group gross margin increased to 53.1%, net profit increased to 9.7%. Among them, the gross profit margin of the brand down clothing business is 57%.

Four, does the valuation callback bring opportunities?

Due to the impact of warm winter, the market is not optimistic about the sales this winter, and Boston's recent stock price is also in the callback. Boston's callback rate has reached 34% since its high stock price in November. In the last month, the price of Bosideng has been around 3 Hong Kong dollars. Will it rise again after being consolidated? After all, the market's concerns about the adverse effects of warm winter weather have been gradually released, while the dividend of Bosideng's transformation is still in existence, and the future performance will be more definite.

From Bosideng's fundamentals, Bosideng's product pricing space still exists, and is expected to continue to drive the company's gross margin higher. According to the first Shanghai estimates, the price of Bosteng in the 2020 fiscal year will increase by about 20%, and according to China gold, the price of Bosteng in the 2020 fiscal year is expected to rise by more than 30%, and net profit is expected to grow by 34% to 1 billion 317 million yuan.

Under the influence of weather and early spring festival in 2020, Bosideng's short-term performance is facing challenges, but sales in 2021 are still worth looking forward to. The Spring Festival in 2021 is late, and the peak season for sales between New Year's day and Spring Festival is longer than that in 2020. In addition, some agencies believe that compared to 2018-2019 years, the winter of 2020 will probably not be warmer winter, and the advertisement of Tokyo Olympic Games in 2020 will also have the opportunity to help winter clothing sales.

From the down jacket industry, Bosideng will benefit from the growth of the industry market in the long run. According to the statistics of China Apparel Association, the market of Chinese down garment market in 2018 was about 106 billion 800 million yuan, up 10% over the same period in 2017. With the upgrading of consumption, it is estimated that the market size of Chinese down garments will reach 138 billion 200 million yuan in 2020.

At present, the market continues to gather to the leading companies. Bosideng, as the leading enterprise in the down garment industry, will continue to benefit from the upgrading of the industry concentration. According to Bosideng executives in the performance communication conference, Bosideng is currently in the market of home down clothing in the 10% level, and the company will have the confidence to occupy the market share of 20%-30% in the future.

From the valuation point of view, although Bosideng has higher growth performance than Canada goose and alliance, but after the stock price falls, Bosideng's PE (TTM) is 26.55, which is lower than Canada goose's PE (TTM) 35.49, lower than PE (TTM) 30.94. In addition, compared with Lining and Anta, the PE of Bosideng is also at a low level.

Buffett once said that we should recognize the enterprises with good quality to invest and buy and hold for a long time at a "cheap" price. In 2019, Bosideng, with a number of reform measures, was growing against the trend in an optimistic market environment. Could it repeat the double market situation in 2020? As mentioned in the first coverage report of CICC in Bosideng, in 2020, as the third year of reform, Bosideng is expected to make further progress in brand building, and the brand's younger, middle and high level, fashion will start the next brilliant.