Textile And Clothing Industry: Clothing Retail Stabilized Month On Month In July And Sports Industry Accelerated Recovery

In July, clothing retail was stable month on month, and recovery in the third quarter was expected. The total retail sales of consumer goods in July totaled 322.3 billion yuan, down 1.1% year-on-year, 0.7 PCT lower than that in June. Among them, the retail sales of clothing, shoes, hats, needles and textiles amounted to 88.9 billion yuan, a slight decrease of 2.5% year-on-year. Compared with June, the decline was slightly enlarged, but the overall situation was stable. We believe that there will be a great improvement in August compared with July, mainly because the Ministry of culture and tourism of the people's Republic of China and the film administration successively promote the resumption of industrial production at the end of July, which indicates that the prevention and control of public health events and the consumption environment will be further improved. We expect that the recovery of terminal consumption in August / September will be due to June / July.

After stepping on the main line of public health events, such as Li Anning, the company still performed well in sports. After the sports industry enjoyed public health events, the cyclical economy recovered. Health consumption and industrial policy driven the high growth of sports apparel market, and the long-term growth logic remained unchanged. The focus on functional features makes the industry highly concentrated and improves rapidly, which is expected to continue to strengthen in the future. Compared with Q1, the growth rate of domestic sports industry's leading income in Q2 has stabilized compared with that in Q1, the low unit number of Anta and Tebu Q2 has declined, and Li Ning's H1 income has slightly decreased by 1.18% over the same period last year. Under the severe retail environment, domestic sports brands still have good development, which shows that sports brand toughness is strong during public health events, and H2 is expected to achieve rapid growth.

Investment suggestions: three main lines of investment: 1) new retail and new manufacturing companies: Antarctic e-commerce, anzheng fashion, kairun shares; 2) valuation + fundamental repair varieties: SEMAR clothing, Desu fashion, Hailan house, taipingniao, GELIS; 3) Hong Kong Stock Companies: Anta sports (02020), Li Ning (02331), bosden (03998).

Risk factors: macro economy is not as expected, consumption recovery is not as expected.