The Zhitong Finance App learned that Guoxin Securities released a research report stating that since July, the textile and garment sector of the Hong Kong stock market has performed well.I am optimistic about the short-term fundamental rebound and long-term competitiveness of the top performers.1. Key recommendations for brand clothing:① Hong Kong stocks, undervalued high-quality brand clothing with steady growth in turnover and benign discountsAnta Sports (02020), Li Ning(02331), XTB International(01368), Taoist, Bosideng. ② A shares, which have good fundamentals, are in a period of growth, and are relatively cost-effective in valuationBühne-Löffen, The Annunciation.2. Key recommendations for textile manufacturing:Short-term customers have gone smoothly to the bank, and the current stock price is a leading sports OEM with a high margin of safetyShenzhou International, Huali Group; Invisible champion in the upstream segment of the industry chainTaihua New Materials, Weixing Co., Ltd..
Guoxin Securities pointed out that since July, the top five companies in the A-share textile and garment sector have been Xinye Textile (002087.SZ), Sunnybird (002154.SZ), Fengzhu Textile (600493.SH), Hailan Home (600398.SH), and Huali Group (300979.SZ); the top five companies in the Hong Kong textile and garment sector are Musang Group Holdings (01817), Prada (01913), Jordan International (00709), Jingyuan International (00709), Jingyuan International (00709) 232), Samsonite (01910).
The main views of Guoxin Securities are as follows:
1. Brand clothing:
1) On the industry side,In June, the footwear company had zero growth of 6.9%. The growth rate slowed down on a high base in the same period last year, and is still growing faster than other consumer goods. In June, the focus was on brands, women's clothing brands in the Tmall flagship store, and the 90-point growth rate was impressive; the Douyin platforms Nike, Anta, FILA, Li Ning, Xteber, and Haggis all grew above double digits.
2) In terms of individual stocks,① Recently, there has been a slight month-on-month recovery from late June to July, but valuations are still at a low level; based on the low base of the 2022 Q4 base, we expect fundamentals to gradually improve from turnover to inventory discounts starting in Q4 this year, leading to the release of profit elasticity; medium- to long-term performance growth is certain, and there is plenty of room for valuation. ② A-share brand clothing: Valuation was repaired and stock prices rebounded at the end of June based on improvements in expectations of Dragon Boat Festival and 618's good performance. The increase in July was reported by Happy Bird and Hailan House, mainly based on the market's better expectations for the mid-term report.
2. Textile manufacturing:
1) Industry aspectsIn June, textile exports from China and Vietnam were still weak, revenue from **** OEM companies grew negatively, and foreign cotton prices hovered at a low level, indicating that external demand was still under pressure; in July, the operating rate of Shengze loom fell slightly month-on-month, but the year-on-year increase was still large; the continued rebound in domestic cotton prices reflected an improvement in domestic demand sentiment.
2) In terms of individual stocksThe stock prices of Huali Group and Shenzhou International, which are leading OEMs with high medium- to long-term order certainty, have continued to rise since June, as domestic and foreign brands have now successfully removed their inventories, and the stock prices of upstream materials manufacturers such as Taihua New Materials, Weixing Co., Ltd., and New Australia Co., Ltd. have risen.
Performance forecast:A number of textile and garment companies announced projected increases in their interim results. Golix's revenue growth rate was impressive, with revenue +17% in the first half of the year, including +30% in the second quarter. Based on improvements in operating quality and inventory levels this year, Sunbird, Coleus, and Semir Apparel are expected to have high net profit elasticity in the second quarter.
Risk warning:1. Recurrent outbreaks; 2. Deterioration of competition; 3. Fluctuations in raw material prices; 4. Systemic risks.