Textile And Garment Industry: Epidemic Prevention Materials To Promote Textile Exports

Investment points

Market review: CITIC textile and apparel index -6.03% in recent months, of which textile manufacturing and brand clothing were 0% and -7.16% respectively, and the Shanghai and Shenzhen 300 index +2.28%. From the valuation point of view, textile manufacturing / brand clothing PE ring ratio +26.85%/+127.79% respectively, up to 65/74 times. From the performance of individual stocks, Meng Jie shares rose significantly as a result of the C2M concept, which led to the overall rise of home textiles. The ST giants, shares of Sun Fu and search for the first half of the series fell.

Industry data & Information:

Brand clothing: clothing consumption improved in April, and textile exports rebounded sharply.

Domestic demand: in 1-4 months, the total retail sales of consumer goods decreased by 7.5% compared with the same period last year (narrowing 8.3PCTs), of which the retail sales of textile and clothing categories increased by -18.5% compared to the same period last year, +16.3/-17.4PCTs respectively. Online, sales of physical goods online are up -12.0% compared to the same period of the year, and the growth rate is +3.1PCTs. At the same time, the sales volume of each category of clothing on the Ali platform has increased significantly. Besides men's clothing, other categories have been recovering positively, or benefited from the demand for seasonal demand, and the shift of consumption to online.

Exports: 1-4 months, the total export growth rate of textile and clothing was -12.1%, the growth rate was +7.6PCTs. According to the category, the total export volume of clothing / textile products was -25.0%/+1.7% compared to the same period, and the growth rate was -1.7/+17.4PCTs. In April, textile exports rebounded sharply, mainly benefiting from the rapid growth of export of anti epidemic materials such as masks and protective clothing.

Textile manufacturing: cotton prices stabilize inside and outside, cotton consumption is expected to rebound

Price situation: as of May 15, 2020, the cotton 328 price index closed at 11515 yuan / ton, the unit price ring / / year-on-year change of +43/-3676 yuan; Cotlook A price index closed at 65.9 cents / pound, ring / / change of +2.5/-11.5 cents. Domestic and foreign cotton prices stabilized, mainly due to the gradual control of the global epidemic, some countries began to resume work, the market is expected to slightly improve.

Supply and demand and inventory situation: in May, USDA expects domestic supply and demand gap to expand 37.1 to 464 thousand tons (compared with 30 thousand tons in April), compared with the expected value in April, mainly due to consumption in May.

Demand is expected to pick up (+65.4 million tons) and production decline (-16.3 million tons). At the same time, the final inventory will be -24.5 10000 tons to 7 million 429 thousand tons, and the Treasury sales will be -10.7PCTs to 89.5%.

Industry view and investment suggestion: after considering the improvement of residents' fitness consciousness after the outbreak, and the State encourages nationwide fitness, it is expected that the demand for sports shoes and clothing is expected to improve. It is suggested that the sports layout of all brands should be paid attention to, and Anta sports, which is expected to be stronger and stronger, will be Anta sports (2020 30x); a stable fashion and effective terminal management efficiency will be maintained (2020 14x); Continue to benefit from the brand / product / channel upgrade, the new fiscal year income is less affected by the epidemic, and underestimate the value of the high-end high-end down clothing leader Bosideng (20/21 fiscal year 15x).