Textile And Garment Industry Monthly Report: Overseas Demand Gradually Recovers, Textile Sector Leader Is Expected To Continue To Benefit

[summary of Research Report]

Plate small topic: overseas demand gradually recovered, textile subdivision leader is expected to continue to be better. Through tracking the terminal performance of 22 international clothing brands with global layout, we find that 20q3 has shown a recovery trend, among which sportswear and luxury goods have performed well: the year-on-year decline of their global business in 20q3 has narrowed to single digit or nearly flat; during the same period, the Greater China / Asia Pacific Region both recovered positive growth (luxury + 10%, Nike / Adidas + 8% / + 5%). Considering that most domestic listed textile enterprises are mainly sports and fast fashion customers, and the sports track has a high degree of prosperity, and driven by the optimization of the supply chain of various brands, the downstream suppliers show a trend of increasing concentration. Therefore, we expect that with the upward transmission of terminal demand, textile leading orders with high-quality customer resources and stable supply chain are expected to continue to improve.

Industry data & Information: brand clothing: high base & demand ahead, zero growth rate of textile and Clothing Co., Ltd. slowed down in November, total retail sales of consumer goods decreased by 4.8% year-on-year from January to November, and the decline rate was narrowed by 1.1pcts on a month on month basis; the retail sales of textile and clothing products decreased by 7.9% year-on-year with a decrease rate of 1.8pcts. In November, the growth rate of clothing increased from - 7.6pcts to + 4.6% month on month, which may be due to the lengthening of sales promotion front and the preponderance of some demand under the high base.

On the online side, the sales of online clothing goods were + 5.9% year-on-year, and the growth rate was + 0.3pcts.

The online sales of each sub industry also showed the same trend. In November, the sales of women's wear / men's wear / children's wear / sports footwear of Alibaba platform (tmall & Taobao) increased by + 17% / + 37% / + 19% / + 24% / + 37%, respectively.

Textile manufacturing: domestic cotton price range shocks, global cotton supply and demand gap expands price situation: as of November 20, 2020, cotton 328 price index closed at 14531 yuan / ton, unit price / month on month / year-on-year change was - 392 / + 1444 yuan. Textile peak season has passed, orders tend to be stable, at the same time, cotton cost support, cotton price downward space is not big, short-term cotton price will maintain interval volatility.

Supply and demand situation: in December, USDA expects that the domestic supply and demand gap in 2020 / 21 will be the same as that in November and last month, which will be 138000 tons, while the Treasury sales will reach 95.1% from - 1.27pcts last month, mainly due to the expected increase of 109000 tons in domestic consumption. From the perspective of global market, the expected demand gap in 2020 / 21 will increase by 824000 tons to 384000 tons compared with the previous month, which is mainly affected by the reduction of production in the United States, India and Pakistan, and the expected growth of consumption in China, India and Pakistan.

Export: from January to November, the cumulative export amount of textile and clothing was + 7.4% (+ 0.4pcts). In terms of categories, the total export value of textile / clothing products was + 29.6% / - 10.2% year-on-year, and the growth rate was - 0.9 / + 1.3pcts. Among them, the export value of textile / clothing products in November was + 21.0% / + 3.6% year-on-year, and the growth rate was - 0.1 / + 6.1 PCTs. The increase in textile export growth was mainly due to the increase in demand for epidemic prevention materials under the second outbreak of overseas epidemic.

Industry views and investment suggestions: the clinical trial effect of new crown vaccine is better than expected. With the implementation of vaccine in the future, overseas demand is expected to rebound. It is suggested to pay attention to Jiansheng group (603558) (13X in 2021) with a large proportion of exports and stable release of Vietnam's production capacity; brand clothing sector is suggested to pay attention to the high prosperity of the industry driven by the 2021 sports year Anta sports (34x in 2021), the leader of sportswear industry, is better than the industry in terms of terminal recovery (603587) (12x in 2021) with continuous improvement in terminal management efficiency, high dividend and room for improvement in valuation; and bosden (2), a middle and high-end down jacket leader, which benefits from brand / product / channel upgrading, has less impact on revenue in the new fiscal year and benefits from cold winter 0 / 21fy24x).

Risk tips: macroeconomic growth slowdown risk; terminal consumer demand slowdown; cotton price change risk.