Based on the tracking of orders from the top manufacturing companies, the recovery trend of orders is secure, especially for leading companies that have the potential to gain market share and expand their customer base.
The 2024 Paris Olympics will be held from July 26th to August 11th. On July 23rd, French President Macron said in an interview with the media that the opening ceremony of the Paris Olympics will be held on the Seine River as scheduled. This is the first time in modern Olympic history that the opening ceremony has been moved out of the stadium and into the open urban space.
The Paris Olympics will open on July 26th. According to data from Feizhu, since July, flight bookings to France have increased by more than 70% compared to last year, hotel bookings have increased by more than 1.5 times, and the transaction volume of visa services to France has increased by more than 1.4 times compared to last year. Marseille and Bordeaux, both known as "Olympic cities," are also popular destinations for Chinese tourists. Since July, flight bookings to both Marseille and Bordeaux on Feizhu have doubled.
The Olympic Games have driven consumer demand for sports shoes and apparel. Textile manufacturing is a labor-intensive industry, especially in the production of footwear. Therefore, the center of global textile manufacturing has shifted multiple times due to the comparative advantages of labor costs in different regions. These regions include the United Kingdom, the United States, Japan, the four Asian tigers, mainland China, and Southeast Asia.
Most of the top footwear and apparel manufacturers (such as Yue Yuen and Feng Tay) emerged in the 1970s-90s (seven of the top ten footwear suppliers to Nike were founded in this period). Top clothing manufacturers such as Shenzhou International were established in 1990. These companies were products of the shift of the global textile manufacturing center to the four Asian tigers and mainland China and benefited from the transfer of the industry.
Guotai Junan Securities released a research report stating that the downstream destocking process has basically ended. Based on the tracking of orders from top manufacturing companies, the recovery trend of orders is secure, especially for leading companies that have the potential to gain market share and expand their customer base.
Sports outfits and footwear related enterprises:
Yue Yuen Group (00551): The improvement trend of the first quarter's footwear manufacturing fundamentals is clear, and the recovery of orders will help restore manufacturing business revenue. Haitong Securities believes that the destocking period of the industry is approaching its end, and the company's manufacturing orders are expected to recover, driving capacity utilization and increasing revenue.
Li Ning (02331): The company held the 2024 technology show in May this year, reviewing Li Ning's technological innovation history over the years and launching new technological products such as Long Que and Jue Ying 3. CICC believes that Li Ning's brand has a relatively leading category expansion ability, product matrix capacity, and series iteration ability. The continuous iteration and matrix operation of professional sports equipment also brings good sales performance.
Anta Sports (02020): The company has scarce multi-brand matrix resources, and the main brand and FILA brand have steady growth. The new outdoor brand continues its high-growth trend, and the landing of Olympic products in the second half of the year is expected to drive growth.
Xtep Int'l (01368): In 2024 Q2, the retail flow of the Xtep main brand increased by 10% year-on-year, and the retail discount was about 75% off; in 2024 H1, the flow of the Xtep main brand increased by a high single digit year-on-year, and the channel inventory turnover was about 4 months.
Shenzhou International (02313): Citigroup recently released a research report stating that among the company's four major customers, Nike, Uniqlo, Adidas, and Puma, Adidas and Uniqlo's parent company, Fast Retailing, have raised their revenue growth guidance for this year, while only Nike has lowered it, and Puma's guidance remains unchanged. The bank stated that it is confident in Uniqlo's order growth this year, and customers other than Nike accounted for about 70% of Shenzhou's revenue last year, and will continue to bring Shenzhou double-digit order growth. The growth rate will increase from 10% to over 50%. Nike's performance is the weakest, with orders for Shenzhou remaining stable or experiencing mild growth.