Textile And Garment Industry Weekly: May 1, May, Clothing Consumption Rebounded

One week review: CITIC textile and apparel this week index Up 1.32%, of which textile manufacturing and brand clothing +1.39% and +1.26% respectively ran the Shanghai and Shenzhen 300 index +2.53%. From the valuation point of view, textile manufacturing / brand clothing ring +1.37%/+1.20% respectively, reaching 44.81/26.57. Judging from the performance of stocks, Chao Hongji, Qingdao Jin Wang and the search for special gains are among the top.

Industry data & Information:

　　 Brand clothing In May, textile and clothing domestic demand and export growth rate rebounded. In May 2019, the total retail sales of social consumer goods increased by 8.6% over the same period last year, and the growth rate was +0.1/+1.4PCTs year-on-year. The main reason is that the holiday market has increased steadily, the holiday movement and the growth of some key commodities have increased.

Among them, clothing, shoes and hats and needle textiles grew at a year-on-year ratio of -2.5/+5.2PCTs to +4.1%. On the offline side, the growth rate of clothing retail sales of 50 key large retail enterprises in China increased from 2.7% to +6.9PTCs, compared with the same period last year. Online retail sales of wearing physical goods grew by 21.2%, an increase of -3.7/-2.5PCTs over the same period of the year, or a decline in the online growth rate or the impact of the "618" promotion in June, making consumer demand lag behind. In terms of export, the export amount of textile / clothing products in May was +3.55%/-0.11% respectively, and the growth rate was around +10.29/+11.22PCTs. Some enterprises wanted to clear the customs before the new tax rate came into force, or the situation of exportation.

Textile manufacturing: reserve cotton volume price stabilizes, USDA expects global cotton supply balance in 19/20. This week cotton 328 price index closed at 14062 yuan / ton, unit price ring / year-on-year change of -30/-2341 yuan, from the national cotton store spanaction situation, the sixth week turnover rate is 64%, ring than last week +11.3PTCs, the average price rose 191 yuan to 12763 yuan / ton. From the perspective of supply and demand, in June, USDA estimated that the supply and demand gap of domestic cotton in 2019/20 was 627 thousand tons, the same as expected in May. In contrast to 2018/19, the gap between supply and demand was narrowed by 331 thousand tons, mainly due to the increase in domestic consumption (+10.9 million tons) less than the increase in imports (+43.5 million tons). From the global market, the supply and demand balance (projected gap of 104 thousand tons in May) is expected to be 2019/20, mainly due to the drop in demand. Output / import volume decreased by 2.8/13.3 million tons respectively, while domestic consumption / export volume decreased by 14.3/13.1 million tons respectively.

Industry outlook and investment advice: taking into account the frequency of tax cuts and tax cuts since 2019, liquidity easing is expected to boost consumer spending. And 2018Q1 high base factor is gradually eliminated, the whole year is expected to show low before and after high. trend 。 Judging from the valuation point of view, the leading brands of clothing brands are less than 20 times valuations and are at a relatively low level. Recommended attention Children's wear Semir's good costumes, undervalued high dividends. Men's wear The leader of Hai Lan's home, as well as the outstanding underachievement of performance and assurance of the group operation capability, is a high-end target.

Risk warning: the risk of macro-economic growth is slowing; terminal consumer demand is slowing down, or sales of brand clothing are lower than expected; and cotton price risk is different.