Textile And Apparel Leading Broker: Focus On Protective Products Manufacturers

In the early March 6th, the two cities opened low, the three major indexes were low, and the textile and apparel industry led two cities. As of press release, Shen Yi textile and apparel rose by nearly 4%. Three Lane Lane (Wei Quan), good news birds, Meng Jie shares, search in special, Xinye textile, Jinhong group and many other stock trading.

The first Sina gold kylin best analyst named Wang Yongping, the best analyst in the textile and apparel industry, Shen Wan Hongyuan securities, said in a recent research report that the new retail mode promoted the digital transformation of the industry, promising the electricity supplier and the cosmetics sector.

The core points are as follows:

Investment tips for this period:

A week's main review and Outlook: according to the statistics of National Bureau of statistics, China's Manufacturing Purchasing Managers Index (PMI) in February 2020 was 35.7%, down by 14.3pct compared with January 2020.

Last week, the textile and garment sector was weaker than the market. Between February 21st and February 28th, Shen Wan textile and clothing index rose 1.66%, stronger than the 7.10 index of Shen Wan A index. Among them, the apparel home textile index rose 0.51%, stronger than the 5.95 index of the Shen Wan A index, and the textile manufacturing index rose 3.80%, stronger than the 9.24 index of the Shen Wan A index.

Recent focus review: 1) in-depth analysis of ODM manufacturing pattern expert meeting: cosmetics industry boom, quality manufacturers are the only valuation of industrial chain depressions, enjoy stable growth dividend industry! Under the new media marketing, the new fast breaking brand, the supply chain behind the live goods, supporting the products of the small businesses, and even some hundred years old product lines, and the sterilized anti epidemic materials are all guaranteed by the manufacturer. 2) Be Meleven's performance Bulletin: in the 19 year, the income was 1 billion 830 million yuan (+24%), and the net profit to the mother was 410 million yuan (+40%), which was in line with the expectation. The company strengthens online sales, tries the water net red economy, makes the effort small program direct seeding, at the same time the product strength and the brand power continues to enhance, creates the high quality explosive fund, the influence expands unceasingly. 3) Semir clothing 19 years performance Bulletin: 19 years of income 19 billion 360 million yuan (+23.2%), net profit of 1 billion 550 million yuan (-8.7%), mainly due to KIDILIZ loss of nearly 300 million yuan, lower than expected. Sales of children's clothing increased by about 20%, about 30% on line, and about 10% below the line. The overall sale of adult clothing is basically flat, with two digit growth on line and a decline in the number of offline digits.

Recent recommendations:

Song song shares the merger of cosmetics ODM leader North Bell, to create the cosmetics sector "Shenzhou International". Baer, the company's leading cosmetics ODM leader, completed a 90% share deal in April 19, and entered the high growth cosmetics industry. North Bell is China's first and fourth largest cosmetics ODM company in the world. Its competitive advantage lies in capacity expansion and R & D leading, creating the Shenzhou International in the cosmetics industry. The company's cosmetics business is growing steadily, with strong certainty and strong profitability in the chemical industry. At present, the market value is undervalued, and PE is 13 times in 20 years, giving the "buy" rating.

Antarctic electricity supplier in 19 years GMV exceeded 350 million yuan, the growth rate of nearly 50%, optimistic about the healthy growth in 2020. We recommend the Antarctic electricity supplier GMV with high speed growth and strong advantages. Our company's core competitiveness is strong, the ecological chain is built and perfect, and the positioning based on high cost performance is in line with the current development trend. We are optimistic that the market share of the core commodities of the company will be further improved. In the past 19 years, the emergence of new products is expected to further expand the company's operating boundaries. We expect that the company will continue to grow steadily in the fourth quarter, and the rate of monetization will be narrowed, GMV will grow pretty, and its growth will contribute to long-term revenue.

The clothing high dividend leads the white horse management barrier to be clear, optimistic about the future market share continues to enhance, the 19 year management change is positive. Hai Lan's home has changed positively since the second half of 2017, and many new brands and overseas market expansion have come to the ground. It is expected that 19-21 years of revenue growth is expected to have positive changes. We believe that the company's five year continuous repo plan will highlight its leading role. Dividends and buybacks provide security margins. The leading edge of Semir clothing in the field of children's clothing has been greatly enhanced, and the logic of market share improvement has been further verified.

Investment recommendations: it is expected that this epidemic will have little effect on cosmetic consumption, mainly due to the high proportion of cosmetics in the second half of the year and the higher proportion of the cosmetics business, and the impact on the brand clothing, especially the high-end option. Recommendation: 1) high growth cosmetics and electricity suppliers: song song share, pelera, PAMY shares, Antarctic electricity supplier; 2) leading white horse: Anta sports, Lining, Hai Lan home, Semir apparel.

Risk warning: if the new coronavirus infection pneumonia lasted for a long time, the performance of the consumer industry may be less than expected.

The first Sina Gold Kirin best analyst named Li Jie, the best analyst in the textile and apparel industry, Everbright Securities, said in a research report that textile and garment enterprises should continue to pay attention to such enterprises.

The core points are as follows:

Weekly market review

Last week (February 23, 2020 ~2 28) Shanghai Composite Index, Shenzhen stock index, Shanghai and Shenzhen 300 were up -5.24%, -5.57%, -5.04%, textile and garment sector rose 1.66%, of which the textile sector rose 3.80%, the clothing sector rose 0.51%. In terms of stocks, Jia Linjie, Yanjiang holdings, Jiangnan high fiber and others are among the top gainers. They are mainly related to the epidemic related concepts, such as broad-minded technology, cross border crossing, Saturday, Vico technology, and sky fashion.

Recent important events and perspectives

Key events / data: 1) the daily output of masks in China has increased rapidly, and textile and garment enterprises have switched production to produce anti epidemic materials. By the end of February 26th, there were over 109 enterprises in the clothing industry to produce protective clothing and segregated clothing, and over 65 enterprises (including lists) had switched over all kinds of masks, and the protective clothing and isolation clothing reached 975 thousand units / day. The production capacity of all kinds of masks reached 8 million 258 thousand / day. 2) the spread of the new crown pneumonia epidemic in the world is concerned about the impact of changes in relevant countries on China's industry. The epidemic situation in Italy and Japan is very serious in overseas countries. Among them, Italy and China are highly dependent on textile and clothing trade. Japan is a country with relatively high export of textile and clothing in China. If the epidemic intensifies or spreads globally in the future, it may affect the export and entry of China's textile and clothing.

Recent view: in the short run, the income and profits of textile and garment companies will be affected by the epidemic. A quarterly report is facing certain performance pressure. The following suggestions are concerned: 1) the market demand for protective products increases, and the relevant production enterprises are concerned; 2) online sales are relatively less affected, concerned about opening shares, Antarctic electricity providers, and so on. 3) concerned about the new election of the rich Russell index list In the future, it is expected to get incremental foreign investment support; 4) pay attention to the undervalued high score red leading company, and provide strong returns with strong defensive ability, such as Hai Lan's home, Lu Tai A, China ll and so on.

News dynamics of industry companies

Industry news: high product prices impede scale growth and Lululemon is also facing pressure to expand. H&M said the epidemic has not yet seriously affected the apparel supply chain, and stores in mainland China are gradually resuming operations. China's stores in Hermes are gradually resuming operations, and the Italy plant is still operating as usual; LBrands's fragmentation of business led to a decline in operating profits, but last quarter sales exceeded analysts' expectations.

Company announcements: Semir clothing, Kai Run shares, Be Meleven, Pathfinder, Saturday, Yanjiang shares, Luo Lai life, Luen Fat shares, Meng Jie shares, blonde Rabbi, Hui Jie shares, Fu Tian shares, Bai Bao Long, seven wolves, Sanfo outdoor, royal family remittance released 19 year performance Bulletin; Shenzhou International announcement epidemic impact and resumption of work; Sanfo outdoor planning increased.

Industry data aggregation

328 grade cotton spot 12887 yuan / ton (weekly decline, -4.30%, the same below); American cotton 71.40 cents / pound (-8.52%); viscose staple fiber 9600 yuan / ton (Chi Ping); polyester staple fiber 6483.33 yuan / ton (-0.87%); long staple cotton 21300 yuan / ton (Chi Ping); inside and outside cotton price difference -1118 yuan / ton (-0.97%).

Risk warning: the impact of the epidemic continues or exceeds the expected retail terminal weakness; exchange rate fluctuations; cotton price fluctuations; and the lifting of Corporate pressure.