Research Report On Textile And Apparel Industry In The Fourth Week Of May

Abstract:

Investment points

The textile and clothing index rose 2.09% in the fourth week of May, winning the market 0.97pct. In the fourth week of May (May 25th May 29th), the Shanghai and Shenzhen 300 index rose 1.12%, and the textile and garment sector rose 2.09%. In the textile and garment sub sectors, shoes and hats performed relatively well, up 13.98%. Other sub sectors include: wool spinning (5.25%), women's wear (4%), other garments (3.39%), silk (2.15%), printing and dyeing (2.05%), other textile (0.35%), men's wear (-0.08%), cotton spinning (-0.14%), home textiles (-2.18%), accessories (-2.42%) and casual wear (-2.51%).

Main data tracking: 1) the total retail sales of consumer goods decreased by 7.50% in April compared with the same period in April, and the growth rate increased by 8.3pct compared with that of the previous month. The retail sales of clothing, shoes and hats and needles and textiles in the enterprises above Designated Size dropped by 18.50% in the same month compared with the same month last year, and the growth rate increased by 16.3pct. 2) retail sales of retail businesses continued downward. As of December 2019, the volume of clothing sales of hundreds of large retail enterprises fell by 4.51% in the same month. 3) the cotton price index in China dropped compared with the same period last year. As of May 29th, the cotton price index of China was 328 yuan, 11807 yuan / ton, 19.02% lower than the same period last year, and 0.78% lower than last week, 4. As of May 29th, the US dollar closed against the offshore RMB 7.1337, which changed -0.51% this week, changing +0.74% for the month, with an annual change of +2.89%. 5) the growth of export volume was positive in April. In April 2020, HS clothing exports amounted to US $20 billion 984 million, up 11.87% over the same period last year. In May 2020, China's total exports amounted to US $200 billion 280 million, an increase of 3.50% over the same period last year, a marked improvement over the 6.60% decline in March.

This week's view: our current industry view is: (1) in the short term, the epidemic will have a greater impact on the textile and garment industry. In the long run, we recommend the local fashion and Semir costumes. (1) brand clothing: with the gradual improvement of domestic epidemic situation, the two quarter of brand apparel has begun to improve, and most of the enterprises' offline sales can return to over 50% of last year's year-on-year sales. Like the leading company, Hai Lan's home, its sales have returned to 60% from last year, and Semir's clothing back to 80% in April. (2) textile manufacturing: with the expansion of oversea epidemic situation, the order of overseas orders has begun to take place, and the future losses are not well predicted. We can compare the economic crisis in 2008 with the fact that some of the small and medium-sized enterprises will disappear in the process. The leading enterprises will have stronger risk tolerance ability and the market share will rise after the crisis. From a medium to long term perspective, we recommend the leading industry group, the current export value of cotton socks accounted for only 2.5%.

Risk warning: the price of cotton fell sharply, and the epidemic continued to deteriorate.