Zhī tōng cái jīng APP learned that Haitong Securities released a research report stating that the export of textile and clothing in both China and Vietnam improved month-on-month in May. The main reason behind this was the optimization of international brand inventory, which generated demand for replenishment from low base last year. The market prefers certainty of performance rather than growth, and low valuation + high dividend remains one of the main investment strategies for clothing brands. Due to the large differentiation of brand operation, the continuous improvement of brand power and the optimization of sales channels determine the growth potential of the brand. On the other hand, attention should be paid to the recovery of export prosperity and overseas enterprise replenishment progress. Currently, high-quality manufacturing enterprises have three investment strategies: ① have the ability to develop high-quality customers, ② can continuously improve supplier share among core customers, and ③ have sufficient cash reserves, stable capital spending and high dividend-paying ability.
The main points of Haitong Securities are as follows:
The export of textile and clothing from China and Vietnam improved month-on-month in May, with textiles performing relatively better.
In May, China's textile/clothing/footwear/luggage export amounts increased by +7.2%/-0.4%/-11.8%/+0.0% year-on-year, while in April, they decreased by -4.3%/-9.1%/-18.3%/-13.5%, respectively. The export of each category improved month-on-month, with textiles turning into positive growth year-on-year, clothing/luggage remaining basically stagnant year-on-year, and footwear still under pressure. From January to May, China's textile/clothing/footwear/luggage exports accumulated a year-on-year increase of +0.6%/-4.2%/-9.4%/-4.9%, respectively.
In May, the export amount of Vietnam's textiles/footwear increased by +3.9%/+0.0% year-on-year, which was slightly different from last month's year-on-year increase of +6.3%/-2.8%, with textiles declining month-on-month and footwear increasing month-on-month. From January to May, Vietnam's textile/footwear exports accumulated a year-on-year increase of +3.3%/+7.2%. Haitong Securities said that overall, the export of textile and clothing from China and Vietnam improved month-on-month in May, mainly due to the optimization of international brand inventory, which generated demand for replenishment from low base last year.
In May, the revenue growth of multiple **** manufacturing companies accelerated.
Among the **** manufacturing companies that have already released their May performance, Fengtai/Yuqi/Zhiqiang/Ruhong's revenue increased by +16.6%/-11.6%/+33.8%/+27.8% year-on-year, and their revenue growth all improved month-on-month (in April, their year-on-year growth rates were +4.4%/-34.8%/+3.4%/+13.1%, respectively), of which the revenue growth of Fengtai, Zhiqiang, and Ruhong accelerated in May compared to April. Haitong Securities said that overall, the data trend of **** manufacturing companies in May was similar to that of textile and clothing exports in China and Vietnam, and the optimization of international brand inventory, which generated demand for replenishment from low base last year, together shaped the strong export data of textile and clothing in May.
The sales results of 618 Shopping Festival have been announced, with fashion and functional categories showing outstanding performance.
Various e-commerce platforms have announced the sales results of the 618 Shopping Festival. According to the Top 10 list of each category announced by Tmall, the Top 5 women's clothing brands are Uniqlo/UR/MOCO/TennieWeenie/sancai, with Uniqlo moving up from third place last year to first place this year and evebly and ONLY, which belong to BestSeller, dropping out of the top 10. The Top 5 men's clothing brands are Uniqlo/Hailan Home/Peacebird/GXG/Ralph Lauren, with Jack & Jones, which ranked third last year, dropping out of the top five. The Top 5 sports brands are Nike/FILA/Adidas/Lululemon/ANTA, among which Lululemon ranked eighth last year but jumped to fourth place this year. The Top 5 outdoor brands are North Face/Camel/Naturehike/Charrcter/KEER, and the Top 5 bedding brands are luolai/Shuijing/Yadu Planet/Boyoo/Huanggulin.
According to the data from Jingdong, the fashion sector of the 618 Shopping Festival exploded in the first 4 hours, with the transaction volume of fashionable sun-protective clothes/children's leisure shoes/basketball shoes/luxury goods increasing by over 100%/200%/100% year-on-year, respectively. According to the data from vip.com, the sales volume growth of women's fashionable sun-protective clothes/new traditional Chinese style clothing/simple and mechanical style clothing increased by four times/three times/over 50% year-on-year, reflecting current consumers' preference for fashion and functional categories.
Overseas key companies INDITEX and Lululemon disclosed their Q1 24 results.
INDITEX's Q1 24 revenue was €8.2 billion, up 7.1% YoY, and net profit was €1.3 billion, up 10.8% YoY, showing a steady growth trend. The company's sales of spring and summer products were good and are expected to continue in Q2, with online and offline sales increasing by 12% year-on-year since Q2. Lululemon's Q1 24 revenue was $2.2 billion, up 10% YoY (previously guided as 9-10%), and diluted EPS was $2.54, up 11.4% YoY (slightly exceeding the previous guideline of $2.35-$2.40). The company's revenue growth rates in the U.S./Canada/mainland China/other regions were +2%/+11%/+45%/+27% YoY, with the U.S. market being relatively weak and growth being mainly driven by China and other regions.
Investment advice
Clothing: Haitong Securities believes that the market's preference for earnings certainty is higher than earnings growth, and low valuations + high dividends are still one of the investment themes. Due to the large differentiation in the operation of each brand, the continuous improvement of brand power and the optimization of sales channels will determine the growth of the brand. It is recommended to pay attention to HLA Group Corp. (600398.SH), Shenzhen Fuanna Bedding and Furnishing Co., Ltd. (002327.SZ), JNBY (03306), Topsports International Holdings Limited Unsponsored ADR (06110), Bosideng (03998), and Samsonite International S.A. (01910).
High-quality Manufacturing: Focus on the recovery of export business and the progress of overseas enterprise replenishment. Currently, high-quality manufacturing enterprises have three investment themes: ① have the ability to develop high-quality customers, ② can continuously increase supplier shares among core customers, and ③ have sufficient cash reserves, stable capital expenditures, and high dividend ability. It is recommended to pay attention to Huali Group (300979.SZ), Stella Holdings (01836), Shenzhou International Group Holdings Limited Unsponsored ADR (02313), Zhejiang Weixing Industrial Development Co., Ltd. (002003.SZ), Zhejiang Xinao Textiles Inc. (603889.SH), and Yue Yuen Ind Co Ltd (00551).
Risk Warning: Changes in consumer preferences, intensified industry competition, and a soft retail environment under economic downturn.