Knitwear, sweater and garment factories have obvious signs of recovery
Knitwear, sweater and garment factories have obvious signs of recovery
2020 is a cold winter for knitwear manufacturers. In the first half of the year, 90% of listed apparel companies experienced a decline in performance, and they encountered a "great retreat" rarely seen in history.
For example, the sweater manufacturer Semir Apparel (002563-CN), the leader in casual wear, is also not immune. In the first half of the year, its net profit plummeted 97%, closed 750 stores, and announced an announcement that it plans to sell a loss-making French children's clothing subsidiary to reduce operating risks. .
In the second half of the year, although knitwear manufacturers have not been able to complete their pains, they seem to have seen the dawn.
Exports are growing for the first time in August, and orders have exploded
From January to July, after my country's clothing exports experienced a recession, exports began to rebound in August, and the clothing industry gradually dissipated.
According to news from the National Development and Reform Commission, in August this year, apparel exports increased by 3.23% year-on-year, which was the first time that the monthly positive growth had resumed after 7 months of negative growth during the year. In addition, according to the statistics from the Bureau of Statistics, the year-on-year growth rate of apparel, footwear, knitwear and knitwear for enterprises above designated size in my country has recovered from -34.8% in March to 4.2% in August.
According to the tracking of Tianfeng Securities, the capacity utilization rate of upstream knitwear manufacturers continued to recover in the third quarter, and the order situation was good. After the fourth quarter enters the peak season, it is expected that the overall production capacity and order situation will continue to recover.
From this point of view, the current apparel industry has entered the traditional "golden nine silver ten" sales season. In addition to the steady recovery of the domestic economy driving demand growth and the arrival of the traditional "golden ninety silver" season, the recent transfer of orders from overseas to domestic knitting factories is also another big factor.
India is the worldâ€™s largest cotton producing country and the worldâ€™s largest jute producing country. Data shows that the Indian knitwear market in 2019 reached 250 billion U.S. dollars (about 1.68 trillion yuan), and the knitting industry accounted for 15% of Indiaâ€™s total export revenue. %about. However, the current epidemic situation in India is hard to be optimistic. As of 11:30 on October 16, Beijing time, the cumulative number of confirmed cases in India has reached 7,307,100, ranking second in the world. The worsening of the epidemic has caused severe damage to the Indian knitting industry and difficulties in delivery.
As another major knitwear country, European and American retailers have transferred a number of orders originally produced in India to China to ensure continuous supply. According to the estimated data, the order schedule for some garment manufacturing in my country has reached May next year, and the export of knitwear in the next few months is expected to maintain the current hot phenomenon.
Affected by this, since October, the stock price of the A-share knitting manufacturing sector has risen to the sky. According to Straight Flush data, the A-share knitting manufacturing index rose 13.64% from October 9th to October 16th, among which the stock prices of Blum Oriental (601339-CN) and Jujie Microfiber (300819-CN) continued to soar .
Upstream raw materials follow the trend and rise, what signal does it indicate?
In India, a large number of orders returned to the country and the industry entered the traditional sales season, resulting in a tight supply of upstream raw materials and dyes. The prices of dyes, cotton, polyester and other raw materials in the upstream of the knitted garment industry have also been "dancing with the smell of chickens" since October.
At the beginning of September, the price of dyes rose sharply, and the price of disperse dyes has been increased. Taking disperse black ECT300% dye as an example, the price of this product has been increased by 36% in the past two months.
In terms of cotton price index, according to Wind data, from October 6th to October 16th, China's cotton price index 328 surged 11.9% to 14,421 yuan/ton, a new high since July last year.
In addition, the polyester POY price index bottomed out at the end of September and rebounded. On October 15, the polyester POY price index was 5,450 yuan/ton, up 7.28% from September 30.
The fundamentals of upstream raw materials represent the barometer of the knitwear factory industry. With the rise of upstream raw materials leading to higher production costs for fabric manufacturers, domestic industry leaders such as Longfeng Cloth, Qiongsheng Cloth, Beneficial Changfeng, Hengwang Cloth, etc. can only follow the trend and rise in the face of shortages and costs. For example, the knitwear manufacturer Longfeng Cloth Company issued a price increase notice on October 11, saying that due to the increase in the price of some raw materials, the unit price of some products was raised on October 12 to ease the pressure on production costs.
The prices of upstream raw materials and fabrics have risen. For knitted garment manufacturers, the prices of raw materials are highly variable, but the prices of finished garments cannot be said to increase. In the era of consumer sovereignty, the homogeneity of the clothing industry is serious, clothing brands have entered a bloody price war, and everyone wants to sell cheaper. According to data from the China Report Hall, from February to July this year, the retail price index of clothing, footwear and hats fell from 100.4 to 99.22, down 1.2% year-on-year, and declined instead of increasing. With the increase in raw material prices driving production costs, the decline in the terminal selling prices of knitted garments will undoubtedly bring pressure on profits for related companies.
The net profit of most companies is expected to fall in the third quarter and is expected to rebound in the fourth quarter
After experiencing the crit of the epidemic in the first half of the year, knitwear manufacturers still failed to usher in the sunshine in the third quarter of this year, and the cold had not cleared.
At present, there are a total of 83 A-share knitted apparel companies, of which 26 companies have released their third-quarter performance forecasts. Judging from the performance forecasts of these companies, most companies are expected to record a sharp decline in net profit. Among the following 26 companies, only sweater manufacturers Baoxiniao (002154-CN), Bangjie shares (002634-CN) and less than 5 companies are expected to achieve positive growth in net profit in the third quarter.
The sweater manufacturers: Semir Apparel, Seven Wolves (002029-CN), and Smith Barney Apparel (002269-CN), the three leading companies in the apparel industry can hardly meet the sluggish industry demand, and the third quarter net profit is expected to decline sharply. In the performance forecast, the words "due to the impact of the new crown epidemic and weak market demand, terminal sales are greatly affected" are mentioned. The net profits of most other companies have also declined to varying degrees and even made losses. Therefore, the third quarterly report of knitwear manufacturers has the highest forecast rate in all A-share industries, exceeding 70%.
After three cold seasons, knitwear manufacturers are expected to "reverse everything" in the fourth quarter. In addition to the aforementioned Indian knitting orders returning to China and the advent of the traditional consumption peak season, domestic demand from the "Double 11 Shopping Festival" has also increased the increase in the consumer market. At the same time, the expected cold winter in the "La Nina" climate has also increased the market's expectations for winter clothing. Demand expectations. In early October, many places in my country, including Henan, Shaanxi, Shanxi, Heilongjiang, etc., experienced snowfall, entering the winter ahead of schedule. This year, there is a high probability that my country will usher in a cold winter. Down jackets and quilts have cold-proof clothing and home textiles and upstream cotton and linen materials. Demand is expected to usher in rapid growth in the fourth quarter, driving demand in the knitted apparel market.
Therefore, the combination of multiple factors is positive for the brand's winter sales. In the fourth quarter of this year, the brands are expected to continue to recover, and the performance of knitting factories is also expected to resume positive growth.