On The First Day After The Holiday, The Value Of 211 Textile And Clothing Stocks Evaporated Nearly 80 Billion, And The Two Quarter Could Be Stable And Slow Recovery.

Affected by the outbreak of pneumonia, the overseas market continued to weaken during the Spring Festival holiday. In the spotlight, A shares ushered in the first trading day of the rat year in February 3rd. Over 3000 shares opened and closed down. As of today (February 3rd), Shanghai stock index fell 7.72%, closing at 2746.61 points, Shenzhen composite index fell 8.45%, to close at 9779.67 points.

First textile network reporter noted that on the disk, only 88 of the A shares of the textile and garment stocks, only the red beans, the China group, the nobon shares, the leading shares, the Xinlong holdings and the Sino submarine shares maintained a rally; from the market value, the total market value of the 211 textile and apparel stocks of Shanghai and Shenzhen stock markets reached 1 trillion and 118 billion 153 million yuan in the first trading day before the Spring Festival in 2020, and the total market capitalization of the listed companies today was only 1 trillion and 38 billion 301 million yuan, with the evaporation of 79 billion 852 million yuan due to factors such as the epidemic in 2020.

The last week of the year was affected by the epidemic, and the domestic retail enterprises were seriously affected. The Spring Festival is the biggest peak season for consumption, especially offline consumption. Due to the fact that the crowd is not encouraged, the impact on the offline department stores is the biggest. Although the supermarket under the line has the function of stabilizing the livelihood of the people, the cost and the cost of operation are facing major fluctuations.

Guotai Junan Securities analyst Hao Shuai introduced that in 2019 China's macro-economic slowdown, clothing retail overall downturn, in addition to children's wear and sportswear growth rate higher, women's wear, men's clothing, home textiles, footwear and underwear and other sub sectors grew steadily, the apparel industry has entered a steady growth stage in the short term. In 2019, the growth rate of clothing retail sales decreased in comparison with the same period last year. It is predicted that the growth rate of domestic garment retail will be negative growth in the first quarter of 2020, which will stabilize in the two quarter.

First textile network reporter noted that research from the agency also showed that the cold winter in 2017 promoted winter clothing consumption, which led to the expected higher growth rate of the garment industry in 2018. In 2018, the winter stock of larger industries was generated, and the turnover rate of the textile and garment industry in the downstream of Shen Wan slipped in 2019 at the end of 3. In the three quarter of 2019, the turnover of clothing household textile inventory slowed down, and the turnover rate was 11.6% lower than the same period last year, the first double-digit decline since 2012. Since April, the growth rate of finished goods inventories in the middle reaches has been significantly lower than that in clothing retail sales. The downstream retail sales in October and November were respectively -0.8% and 4.6%, higher than that in the middle reaches of the textile industry, and the growth rate of -17% and -3.3% was significantly higher than that of the apparel industry. 18 years of winter clothing inventory, more than 2019 warm winter weather, downstream clothing industry or in the inventory stage.

Ju Xinghai, a researcher at Guosheng securities, said that affected by the epidemic, the social consumer market is expected to be impacted in the short term, especially the optional consumer goods will be more affected, especially in the fashion consumer industry, including the clothing industry. However, due to different product attributes and channel patterns, the impact is also different. From a long-term perspective, the impact of the epidemic will be short-time and will not have a long-term impact on the industry.

Observation shows that the impact of the epidemic on the offline consumption is greater than that of online consumption. Offline consumption of physical stores, as the number of outgoing people is reduced, consumer demand will soon be declining. Considering the epidemic and the logistics during the Spring Festival, there will be some obstacles. Online consumption will have some negative effects in the short term. However, from the perspective of the next 1-2 quarters, online consumption is better than offline. From the perspective of the whole year, the relatively high fashion consumption sub sectors on the Internet will be relatively less affected.

In the long run, Ju Hing Hai believes that consumption will return to normal with natural demand after the outbreak is calm. For investors, we should pay close attention to the outstanding companies that are outstanding in brand competition and differentiation. When facing short-term shocks, the clothing companies are facing the situation of terminal consumption decline and stock accumulation. Related quality listed companies can impact on the order end and terminal inventory allocation to a certain extent, while the negative impact of products and strong operation capability will be relatively small.

However, Hao Shuai, an analyst of Guotai Junan Securities, further believes that the follow-up epidemic prevention and control requires residents to reduce their outgoing activities, and will continue to have a negative impact on the retailing of clothing lines. Due to the timely prevention and control measures, the probability of retail sales decline in the first quarter is high, and the trend is expected to extend to the two quarter at least. But considering the influence of terminal inventory and other factors, the impact on garment industry performance will continue to the three quarter.

Hao Shuai introduced that according to the income data analysis of the textile and garment sector, the quarterly income of the whole plate accounted for the highest proportion in the four quarter, and the average value of operating income in the 2002-2018 and fourth quarter was 29.07%. The remaining three quarters were in the three quarter, in the two quarter and the first quarter, respectively.

The fourth quarter is the main component of the annual income as the peak season for winter clothing sales. At this stage, the new crown pneumonia mainly affects clothing consumption in the first quarter. As a continuation of the sales of winter clothing and the peak of Spring Festival consumption in the first quarter, the sales of clothing will suffer a heavy setback. It is expected that the overall consumption of clothing will decline sharply in the first quarter, or even negative growth. If the epidemic continues to Q2, summer sales will be depressed, which will pressure the performance of listed companies to a certain extent. Hao Shuai thinks so.