Textile And Apparel Industry Weekly: Expected Retail Growth In 1~2 Months

Last week, the textile and garment sector was weaker than the market.

Last week, Shen Wan textile and apparel index rose 3.56%, weaker than the 2.27 index of Shen Wan A index.

Among them, the apparel home textile index rose 3.57%, 2.26 percentage points less than the Shen Wan A index, and the textile manufacturing index rose 3.53%, weaker than the 2.3 index of the Shen Wan A index.

Recent key data review: PMI rose in January.

In January 2019, China's Manufacturing Purchasing Managers' index PMI was 49.5%, rising by 0.1 percentage points, ending 4 consecutive months of decline, but still in the contraction range.

Fourth quarter consumption of high-end clothing continues to grow. We continue to recommend high-end brands with high quality subdivision tracks.

From the global luxury leading companies' disclosure, the high-end apparel consumption boom in the 18 quarter of four quarter has been maintained at a high level.

Among them, LVMH has achieved 15% organic growth in Asia Pacific market besides Japan. Hermes has achieved 13.1% growth in Asia Pacific market except Japan, and its growth rate is at a relatively high level in the historical range.

Among them, the product is the fastest growing quality product in the clothing industry. The 18 years of same store promotion, channel expansion, and the elasticity of performance are great.

We believe that the company has a high quality track in the high-end casual wear field, and the company has strong barriers for many years.

In the industry's in-depth report on the market value of US $10 billion, the world's top men's clothing brand RalphLauren and the high-end leisure apparel industry report, we put forward a high-end leisure wear market with sports attributes, which has a broad market space, growing tens of billions of dollars in market value, and the number of RalphLauren outlets worldwide.

We anticipate that the 18 and 19 year composite growth rate of 30% is higher than that of 40%+, giving 19 times 25 times the target valuation, which is more than the current space.

We believe that the leading edge of the electricity supplier sector is constantly strengthening, and 19 years are expected to continue to grow.

Key recommendations: 1) cross border pass three quarterly report quality improvement, company Q3 single quarter revenue and profit grew 86.7%, 78.1%, while bargaining power increased, payable account extended, accounts payable increased by 440 million yuan in the single quarter, driving single quarter operating cash flow net inflow of 310 million yuan, improve the quality of operation, super market expectations.

We firmly believe that the core competitiveness of the company will continue to strengthen, and achieve higher quality growth in the peak season.

2) the GMV of Antarctic electricity supplier is growing rapidly and its advantages are constantly strengthening.

The electricity supplier industry is facing a downward trend in consumption and a slowdown in online traffic growth.

The core competitiveness is strong, the ecological chain construction is perfect, and the positioning based on high cost performance is in line with the current development trend.

We are optimistic that the market share of the core commodities will be further improved, and the growth of new products will be good. In the next 19 years, we are expected to further enhance the quality improvement and quality control.

In January, the peak of the Spring Festival consumption was misplaced, and the performance of public clothing was good.

In the long run, we believe that consumption will become the first engine of economic growth and continue to look for investment opportunities for medium and long term consumer goods.

From the perspective of foreign capital allocation, we further benefit the leading and competitive public leaders. We recommend that the valuation is at the bottom of the historical zone: the company has changed positively since the second half of 2017, and many new strategies such as emerging brands and overseas market expansion have come into being.

We believe that the company's next five years' continuous repurchase plan will show its leading role. The valuation is at the bottom of the historical section. The dividend yield of 17 years is as high as 4.95%.

Investment suggestion: brand clothing increased by about 20% before the Spring Festival, and fell after the Spring Festival. It is expected to maintain a double-digit growth in 1-2 months.

We believe that market risk preferences will gradually improve, focusing on the high growth of high-end leading companies and e-commerce cosmetics companies.

Recommended targets: 1) high growth high-end clothing: BILLIN, song, 2) electricity supplier growth stocks: Antarctic business, cross border; 3) quality cosmetics target: volla; 4) public white horse: Hai Lan's home.

Risk warning: deterioration of retail environment and adjustment of channel inventory.