The Market Has Huge Space And The Clothing Industry Has A More Obvious Marginal Improvement Trend.

The "6. 18" consumption season is coming soon. At present, Jingdong and Tmall platforms are built on the "strongest goal in history".

According to media reports, in June 1st only 0 seconds after just 46 seconds, Tmall clothing sales exceeded 100 million yuan, opened for 7 minutes, sales exceeded 1 billion yuan, an increase of 40% over the same period.

Clothing belongs to high frequency consumer goods, the industry trillions of market space is huge.

Analysts believe that the clothing industry has a more obvious marginal improvement trend.

With the promotion of consumption, tax reduction and other policies landing and the impact of peak season on consumer stimulation, the industry is expected to gradually achieve recovery.

Gradual improvement of industry

According to the National Bureau of statistics, following the -2 low of 1.80% in January 2019, the consumption of clothing shoes and hats and needle textiles in April was 100 billion yuan, up from -1.1%.

In 2019 1-4, clothing, shoes and hats and needles and textiles consumed 441 billion 800 million yuan, up 2.2% over the same period last year.

For the poor performance of the relevant data in April, analysts generally believe that this is mainly due to the "May Day holiday error" factor, and is expected to benefit from the holiday effect in May, the growth of clothing consumption will rebound significantly, while the whole year is expected to continue to maintain low growth expectations.

CITIC Securities Research Report believes that the actual situation of the apparel industry is more optimistic than expected.

Compared with several rounds of adjustment in recent years, the overall environment of the industry is improving, the inventory situation is more healthy, the store structure is more reasonable, and the industry competition pattern is clearer.

Although the overall clothing consumption and the operation of listed companies weakened in the second half of 2018, the growth pressure in the second half of 2019 eased considerably compared with the larger growth base in the first half of 2018 compared with the first half of 2019.

At the same time, the overall consumption is expected to be marginally improved. As a cyclical industry after the consumer boom, the revival of clothing consumption "may be late but not absent."

Focus on the two major segments

As of June 11th, CITIC brand clothing index rose 11.42% this year, running the Shanghai and Shenzhen 300 index (up 23.54%).

From the valuation point of view, CITIC brand apparel index price earnings ratio is 26.36 times, near the historical level.

Guoxin Securities analyst Zhang Junhao and Ceng Guang believe that since March this year, the industry and key companies have some marginal improvement in data. In the future, with the promotion of consumption and tax reduction and other policies landing, it is expected that in the second quarter, the industry fundamentals will be gradually recovered after the elimination of high prime numbers.

It is suggested that active layout should be placed in the high quality track, and at the same time, a growth enterprise with the ability of concentrating and upgrading.

Since the second half of last year, although the industry has experienced the impact of poor retail environment, children's wear and sporting goods have achieved sustained and rapid growth.

CSC also looks at the two subdivision areas of children's wear and sportswear. It believes that children's clothing quality and sportswear should focus on their functions, forming a strong brand premium and gaining more channel support.

The two subdivision fields are relatively low in fashion, strong convergence in consumer demand, more efficient supply chain integration capability and cost advantage under scale effect, which is conducive to continuously improving competition barriers for leading brands and improving market share.

The big and capital markets have recently raised the ratings of many Chinese sports apparel companies such as XTEP and Baosheng. Under the background of macroeconomic uncertainty, the sports apparel industry has shown a defensive nature.

As a result of the double-digit year-on-year growth in the number of sports apparel enterprises tracked in the first quarter, the agency maintained an optimistic view of the sports apparel industry, saying that the growth of disposable income increased consumer health awareness and consumer upgrades. Besides, the policy support will support the sports related long-term consumption growth per capita in China, and favour the multi brand strategy and sports apparel enterprises with sustained and high-quality growth.

Author: Chen Xiaogang