Textile And Garment Industry: Continuous Improvement In Clothing Sales Is Expected To Drive Plate Valuation Recovery.

Summary of the report:

In March, the domestic epidemic situation was effectively controlled, production and life order gradually returned to normal, and sales of clothing lines under and offline had a restorative growth. In March, the total retail sales of consumer goods decreased by 15.8% compared with the same period last year. The decline was narrowed by 1-2 compared with that in 1-2 months. The retail sales of clothing, shoes and hats and needles and textiles decreased by 34.8% over the same period last year, and the decline was narrowed compared with that in February alone. Ali platform data also showed that clothing sales in March were significantly better than in February, and the proportion of electricity supplier sales was high and active to new retail transformation enterprises performed better. It is estimated that the apparel industry will show a monthly improvement trend in the two quarter, and the valuation of the plate is expected to achieve a certain degree of recovery.

According to the industry, online sales in various industries improved significantly in February compared with that in February, and the best performance of sportswear was 15%. Affected by the epidemic, sales of apparel enterprises are sluggish, and the overweight line has become the choice of the vast majority of garment enterprises. In particular, the leading brands of sports brands have achieved good results in digital transformation and online consumer operation.

In terms of industry structure, the trend of share to head brand concentration continued. Especially in sports and children's clothing two industries: 1) children's wear balbara's leading position is stable, and the market share is far ahead of other brands. 2) sports apparel CR10 continued to improve, Adidas continued to perform strong, and domestic brands Anta and Lining ranked the top and relatively stable.

In March 2020, under the strategy of focusing online sales and new retail, most of the listed companies' brand online sales increased positively. In the first quarter, Lining sales point (excluding Lining YOUNG) had a high decline in retail sales of 10%-20% compared with the same period last year, of which the 10%-20% business segment achieved low growth. Anta sports performed well in the first quarter: Anta's brand flow dropped by 20% to 25%; the number of units in the FILA brand slipped; the number of other single brands declined; the major brand e-commerce providers achieved good growth.

Investment advice: long term recommendations focus on two main lines: first, the long-term trend of sports apparel is unchanged, and it is recommended to continue to focus on Lining and Anta sports. The two is the textile manufacturing enterprises with high-quality customers. The customers of Shenzhou International Group and JSC group are mostly outdoor sports outdoor brands, with high quality capacity and sufficient orders, and the performance growth is still high under the epidemic situation.