Industrial Securities - Textile Industry Releases Warming Signal

Abstract of the Research Report:

In the first week of August, the textile and clothing index fell 0.26%, underperforming the market by 0.54 PCT. In the first week of August (August 3 - August 9), the Shanghai Shenzhen 300 index rose 0.27%, while the textile and clothing sector rose - 0.26%. In the textile and clothing sub industry, silk performance was relatively good, up 2.70%. 0.1%), and other accessories (- 10.0.1%), including men's clothing (- 10.0.1%), other accessories (- 10.0.1%), women's clothing (- 10.0.1%), and other clothing (- 10.0.1%).

Main data tracking: the total retail sales of social consumer goods decreased by 1.80% year-on-year in June, and the growth rate rose by 1.00pct; the retail sales of clothing, shoes, hats, needles and textiles of Enterprises above the designated size decreased by 0.10% year-on-year in June, and the growth rate rose by 0.50PCT. 2) Clothing retail sales of retail enterprises continued to decline. As of May 2020, the retail sales of clothing of 100 large-scale retail enterprises in China decreased by 15.70% in the same month. 3) China's cotton price index declined year on year. As of August 7, China's cotton price index 328 was 12408 yuan / ton, down 8.65% compared with the same period last year, and up 0.72% month on month; 4) offshore RMB decreased compared with last week. As of August 7, the closing price of US dollar against offshore RMB was 6.9674, with a change of - 0.33% this week, a - 0.79% monthly change and - 1.63% annual change. 5) In June, the export value of clothing and textile was basically flat on a month on month basis. In June 2020, the export amount of HS clothing reached 28.028 billion US dollars, up 18.20% year-on-year. In July 2020, China's total export value was 237.630 billion US dollars, up 7.20% year-on-year, which was even stronger than the 0.50% increase in June.

This week's view is: 1) the short-term impact on the textile industry. ② In the long run, we recommend Pacific bird and Samma clothing. (1) Last year, more than 90% of the clothing brands improved, and the sales of most of the clothing brands began to recover. In June, the online growth rate of SEMA clothing was maintained at about 10%, while the offline growth rate declined slightly due to the impact of Beijing epidemic. The performance of taipingniao in Q2 is brilliant. E-commerce and new retail layout continue to make efforts in the current consumption environment. We are optimistic that taipingniao will continue to make efforts in the second half of the year and maintain a stable growth rate. (2) In July, with the recovery of orders of cotton and socks, the production of cotton and sock will recover to some extent in July, and the output of cotton socks will recover. We are optimistic that after the epidemic, Jiansheng group will increase the market share of the industry, and add orders from high-quality customers to drive ASP to achieve stable growth.

Risk tips: macroeconomic risk, raw material prices rise, and the impact of the epidemic continues