Securities Trader Report: China'S Leading Apparel Enterprises Showed A Significant Growth Trend In February

According to the research report released by BOCI, clothing exports in January and February were under pressure in the context of high overseas inventory and weak demand. To sum up, the clothing sector's export is under pressure at the beginning of 2023, and there is still uncertainty about overseas demand. It is expected that in the future, as overseas service enterprises gradually complete de stocking, exports are expected to gradually repair. In February, China's online retail sales of clothing recovered, of which the online retail sales of Taoxi platform was 78.05 billion yuan, an increase of 18.24% year on year, significantly improving month on month. With the further recovery of subsequent consumer demand, online sales of clothing are expected to improve. The major textile clothing companies actively promote online multi platform sales layout, and the online sales of the women's clothing industry show a remarkable performance, leading the growth trend.

BOCI's main views are as follows:

From January to February 2023, clothing exports will be under pressure.

In January and February, the export value of China's textile yarn, fabric and its products was US $19.165 billion, down 22.38% year on year; The export value of clothing and clothing accessories was 21.678 billion US dollars, down 14.72% year on year. The year-on-year decline of exports in January and February was obvious, mainly due to the weak demand superimposed by overseas high inventory levels, and the high base last year. To sum up, the clothing sector's export is under pressure at the beginning of 2023, and there is still uncertainty about overseas demand. It is expected that in the future, as overseas service enterprises gradually complete de stocking, exports are expected to gradually repair.

The online sales of clothing improved in February, and the overall online consumption in January and February still needs to recover.

In February, the online sales of clothing recovered as a whole, of which the online retail sales of the Taoxi platform was 78.05 billion yuan, an increase of 18.24% year on year, with significant month on month improvement, mainly due to the changes in the Spring Festival season and the gradual recovery of terminal consumption. On the whole, online sales of clothing rebounded in February, but from the overall situation of January and February, online sales of clothing declined year on year, and clothing demand still needs to be improved. With the further recovery of subsequent consumer demand, online sales of clothing are expected to improve.

Textile clothing leaders actively layout the e-commerce field, and online sales of women's and men's clothing industry are eye-catching.

The online performance of major women's wear companies was outstanding, and the operation advantage of Golis Multi brand was significant. The Taoxi platform increased by 86.64% year-on-year in February, indicating the company's strong growth momentum. The sales of the Taoxi platform of Disu Fashion/Jinhong Group in February maintained a rapid growth, with an increase of 47.46%/40.96%. On the whole, online sales of women's clothing in January and February performed well. The online sales of men's clothing also improved significantly. The sales of Taos in February increased by 56.50%/65.56%/95.47%/60.47% year on year, which shows good elasticity. The online sales of the sports industry maintained a steady growth in February, but affected by the high base brought by the 2022 Beijing Winter Olympics, the overall online sales declined year-on-year. In February, the online business of home textile recovered month on month, and the growth rate of online sales of Luolai Life became positive year on year, but there is still pressure on the whole. Overseas leaders have fluctuated in the development of domestic e-commerce layout, and the future advantages of domestic brands are expected to continue to strengthen.

Investment advice

1) Normalization of epidemic prevention policies is conducive to the recovery of offline consumption, and the income of popular leisure brands and high-end women's clothing leaders has recovered flexibly. The focus is on the highly flexible Sima Clothing (002563. SZ), Hailan Home (600398. SH), Taipingniao (603877. SH), Golis (603808. SH), Disu Fashion (603587. SH), and Xinhe Shares (003016. SZ); During the epidemic, the stable growth target benefited from its own brand leading advantage and low-frequency consumption attribute, and its revenue grew steadily. With the recovery of offline consumption after the epidemic, it is expected to continue a good trend in the future. The stable growth target Biyinlefen (002832. SZ), Baoxinniao (002154. SZ), and Bosiden (03998) are mainly recommended.

2) The valuation of sports apparel has entered a reasonable allocation range, which is expected to further expand the market share. We recommend Anta Sports (02020), Li Ning (02331), and Tebu International (01368), the leading sports apparel companies in China, and we suggest to focus on 361 degrees (01361).

3) This year's export is expected to be low at the beginning and high at the end. We are optimistic about the smooth progress of destocking of overseas leading brands. Overseas export orders are expected to improve in the second half of the year. In addition, the overseas customers of key companies account for a high proportion and form deep strategic cooperation, which is expected to benefit with the gradual recovery of overseas demand. The textile leader Huali Group (300979. SZ), Shenzhou International (02313), Xin'ao Shares (603889. SH) and Zhejiang Natural (605080. SH) are recommended.

Risk tip: consumption recovery after the epidemic is not as expected; Market competition intensifies; The price of raw materials rose.