Lining And Baozi Are The First Choice For Beautiful Routes.

Clothing consumption showed a steady growth trend; clothing consumption accounted for the proportion of clothing consumption increased; leisure, sportswear and high-end women's clothing became the focus of the market; the middle and high income groups were the main force of consumption; clothing consumption, especially footwear consumption, had a strong consumption inertia.

Considering brand positioning, business mode and financial performance, we believe Lining, Baozi, Yong en and I.T are the priority objects. Among them, Lining and baozi deserve our attention.

Some characteristics of the clothing retail industry, the National Bureau of statistics data show that the total retail sales of consumer goods in China has reached a compound growth rate of 12.1% over the past 2000-2004 years.

The total retail sales of clothing in the same period increased by 10.3% annually.

Although the growth rate of total retail sales of clothing is lower than that of total retail sales of social consumer goods, it still presents a steady growth trend.

According to the consumption analysis of different income structure, we find that the proportion of clothing consumption of high income group is higher than that of low-income group.

With the increase of residents' income, clothing consumption accounts for an overall increase in clothing consumption.

From the functional point of view, we find that the growth rate of the consumption of professional wear has slowed down significantly, but the consumption of casual wear (T-shirts, jeans, jackets, etc.) and sportswear has increased rapidly.

We believe that casual wear still has much room for growth in the future.

In addition, the sales growth rate of women's clothing is also excellent. The sales growth rate for two consecutive years is around 20%.

At the same time, middle and high class women's clothing is the pulling point of women's clothing growth.

We find that the growth of consumption expenditure of the high income group is much faster than that of the low income group.

The highest income group has a compound growth rate of over 2000-2004 consumption expenditure over the past 16% years, while the lowest income group has a compound growth rate of less than 3% over the same period.

In addition, the clothing expenditure of the middle income group and the middle upper income group accounted for the largest proportion of the total expenditure, and the proportion was generally around 10%.

Consumption inertia determines consumption expenditure. We find that the proportion of footwear consumption expenditure has declined, and the consumption volume has changed little, sometimes even negative growth.

Through the panel regression analysis of five years' data of 31 provinces and cities in China, we find that clothing consumption has obvious consumption inertia (that is, the consumption of this period has obvious dependence on the consumption behavior of the previous period), and the consumption inertia of footwear products is more obvious.

The results show that the consumption of clothing products may be more determined by consumption habits, and people will not significantly increase their consumption level because of wage increases. Footwear consumption is most obvious. Other disposable income such as income will basically not change consumer spending habits, while increasing wages for stability is the decisive force in changing income habits. The reason for the larger consumption inertia of shoes may be that they are still in the stage of basic consumer goods, and shoes are just the clothes that are easily overlooked.

We choose 15 representative clothing and footwear listed companies for comparison. These companies are not all within the main market, but we may be more concerned about those companies that are mainly in the mainland market.

First, single brand VS is multi brand.

Most of the 15 clothing and footwear listed companies adopt multi brand operation strategy, which is generally applied in different levels, different grades, different age coverage, different product coverage, and different market coverage.

We believe that the advantage of a single brand lies in its clearer brand positioning and higher social awareness. The drawback lies in its larger business risk.

Therefore, such strategies are more suitable for companies with sufficient market power.

The advantage of multi brands lies in its wide coverage and relatively low business risk. The drawback is that the brand is vague and requires a high level of management.

We find that companies with better operation conditions seldom operate more than 3 brands at the same time, and seldom use multi brand strategy at different levels.

Second, the integrated business model.

The clothing and footwear listed companies in Hongkong have diversified business models. The brand strategy is mainly based on multi brands, mainly in terms of leisure, the clothing structure is the main product structure, the price strategy is generally the middle end, the population structure is mainly young and middle-aged, and the gender positioning is mostly for both men and women.

Third, financial performance.

Over the past four years, the average income growth rate of clothing and footwear companies in Hongkong has reached its peak in 2004. The growth rate of income in 2005 has generally been on a downward trend. Only a few companies such as 0210.HK have increased their income in 2005 over 2004.

In addition, most of the company's income growth rate fluctuated greatly, and only the income growth rate of wing en, Baozi, Si Jie (0330.HK), Lining (2331.HK), Bao Haosi (0483.HK) and I.T (0999.HK) remained stable.

We believe that Lining, Baozi, Si Jie, Yong en, I.T, Bao Haosi and Li XinDa of Hongkong listed clothing and footwear companies are worth noticing.

If the scope is further narrowed down to the main market companies, Lining, Baozi, Yong en, I.T and XinDa can be selected.

If we consider the scale factor again, Lining, Baozi, Yong en and I.T will be the first choice.

Lining and baozi are the first choice. Lining and baozi are still the first choice. We give the company a rating of "buy" and the target price is HK $10 and HK $13.8 respectively.

The specific analysis is as follows: first, Baozhuang fashion has the concept of "quasi luxury"; Lining has become the first choice for consumers in the two or three tier cities of the mainland to choose sports products.

The key to their success lies in the management of consumers' expectations in order to create good popularity, reputation and loyalty.

Secondly, brand positioning coincides with the trend of clothing consumption.

Lining's target consumer group is a 16-26 year old youth group, mainly secondary school students and university students. The target consumers of baozi are 25-35 year old career women and 28-38 year old successful men.

Lining mainly develops at the level of sports products, while baozi mainly carries out brand operation at the high-end product level.

Thirdly, they set up the threshold of operation.

Lining's threshold is in terms of scale. We estimate that Lining's sales in 2006 will exceed $400 million, which will be the top three in the mainland.

Companies locate luxury goods by means of advertising in top fashion magazines and aviation magazines.

Fourth, typical growth stocks.

We predict that Lining's income and net profit CAGR will be 31% and 35% respectively in the 2005-2008 years, while the 2005-2008 income and net profit CAGR of baozi will be 19% and 36.6% respectively.