Textile And Garment Industry: In May, Exports Of Textile Products Picked Up Significantly, And Clothing Remained In The Doldrums.

Review of market situation in recent two weeks

In the past two weeks (May 25, 2020 - June 5th), the Shanghai Composite Index, Shenzhen stock index and Shanghai and Shenzhen 300 were up 4.16%, 5.43% and 4.63% respectively, while the textile and garment sector rose 6.56%, of which the textile sector rose 4.11% and the clothing sector rose 7.89%. In terms of stocks, business wins the world, shares of sands, Wes shares, Sino submarine shares, La Natsu Bell and other top gainers, and the biggest decline is bar Jie, Meng Jie shares, di Su fashion, one net one hit, Jiangsu sunshine and so on.

Recent important events and perspectives

Important events: 1) in May 2020, the export volume of textiles and clothing in dollar terms was +77.34%, -26.93%, 1 and May respectively, +21.30% and -22.80% respectively. Among them, textiles contained masks, etc. the export growth rate was positive in April and increased in May. Clothing export performance was still in the doldrums, and the decline in May was slightly larger than that in April. 2) the US Department of Agriculture issued the May global cotton production and storage forecast. It is estimated that global cotton production will decrease by 3% in the year 20/21 (2.7% in China) and 10.9% in consumption (11.8% increase in China).

Recent view: in the short term, affected by the epidemic situation at home and abroad, the performance of 20Q1 brand clothing and textile manufacturing companies is facing pressure (except for some epidemic related protective supplies manufacturers). At present, domestic epidemic prevention and control is beginning to show effectiveness, passenger flow and demand are gradually recovering. Q1, which is the core of brand clothing, is expected to bottom out, and Q2 performance is expected to improve. However, foreign epidemic is still serious. Although Europe and other regions have resumed production and resumption of production, there is no obvious turning point in epidemic prevention and control abroad, and social turbulence in the United States will affect demand side, and maintain caution in overseas demand and textile exports in the two quarter. Suggestions: 1) the concept stocks of protective products are highly concerned, especially the global epidemic spread, export demand is expected to increase, short-term performance increases significantly, and relevant production enterprises are concerned. 2) online sales are relatively less affected by the epidemic, focusing on the Antarctic electricity providers with high online income and the acquisition of live TV trademarks on Saturday. 3) after the mitigation of domestic epidemic situation, we should pay attention to the investment opportunities of large scale sectors, such as the high degree of subdivision and the recovery of consumption, including Anta, Lining and so on.

News of industry companies

The recovery rate of Adidas in China is faster than expected. In May, the gross income of the Greater China region was growing positively; the total revenue of Canada goose in the 2020 fiscal year increased by 15.4%, which would shrink the department stores' channels to enhance profitability; UNIQLO announced that it was going to enter the mask industry to solve the hot spot of wearing masks in summer; the I.T group had renewed its profit early warning and increased its annual loss to HK $700 million. Arthur lost 882 million yen in the first quarter, and electricity business sales increased by 60%.

Summary of industry data

328 grade cotton spot 11922 yuan / ton (weekly decline, +0.97%); American cotton 67.45 cents / pound (+3.06%); viscose staple fiber 8800 yuan / ton (+0%); polyester staple fiber 5876.67 yuan / ton (+1.38%); long staple cotton 19600 yuan / ton (+0%); inside and outside cotton price difference -1823 yuan / ton (+5.50%).