The Second Wave Of The Epidemic Caused The Transfer Of Overseas Manufacturing Orders

This week, we suggest:

(1) Clothing sales are booming during the National Day: our analysis mainly benefits from:

1) The temperature dropped sharply during the festival, which was good for winter clothing sales; 2) due to the proper control of domestic epidemic situation, the recovery trend of "retaliatory consumption" was obvious during the national day. We estimate that many listed companies have achieved an offline growth of more than 30% during the National Day period (10.1-10.8), and nearly doubled online growth, with growth exceeding expectations.

(2) Cotton textile industry orders pick up: we analyze, this mainly benefits from: 1) India, Sri Lanka, due to the spread of the epidemic, many orders returned to China; 2) upstream cotton, chemical fiber and other bulk commodity prices, driven yarn prices to rise (since September, cotton / viscose staple fiber / viscose filament / polyester staple fiber / polyester filament increased by 4% / 9% / 0% / 1% / 3%, yarn increased by 3%). We estimate that the capacity utilization rate of many OEM companies has risen from the lowest 50% in April and may to 80-95%, showing an obvious warming trend. At present, we recommend to pay attention to four main lines: (1) the third quarter report is expected to usher in an inflection point or its performance is expected to exceed expectations: kairun shares and taipingniao; (2) cotton textile theme: outbreak of epidemic in India and Sri Lanka, order transfer to China, the beneficiary target: Bailong Oriental, Tianhong textile, Shenzhou International, etc.; 3) sales exceeding expectations during National Day, and La Nina is expected to bring extreme cold weather to drive winter clothing sales Sales, next year's valuation switch and other factors are expected to boost the confidence of the clothing sector. SEMAR clothing, Hailan home and biyinlefen are recommended.

Market review: outperforming Shanghai Composite Index 1.98pct

This week, the SW textile and garment sector rose 3.66%, outperforming the Shanghai Composite Index of 1.98pct and underperforming the gem by 0.15pct. This week, underwear performance rose by 10.66%, while textile rose by 3.03%. In terms of individual stocks, since September, senior executives of urban beauty company have repeatedly increased the company's shares to boost market confidence. Meanwhile, they have joined hands with Alibaba's new manufacturing platform "rhinoceros intelligent manufacturing". The stock price continued to rise by 45.21% this week. Bosden's share price rose 32.08% this week, benefiting from the national cooling and peak season since October.

Industry performance: China's cotton price index rose 0.19% this week

As of October 9, China's cotton 328 index was 13256 yuan / ton, up 356 yuan / ton or 2.76% this week. As of September 30, the import cotton price index (1% tariff) was 12339 yuan / ton, up 149 yuan / ton or 1.22% this week. As of October 9, the closing price of cotook a index (1% tariff) was 12208 yuan / ton, which increased 271 yuan / ton and decreased by 2.27% this week. Overall, the difference between cotton prices within and outside this week narrowed from 701 yuan / ton to 624 yuan / ton.

Industry news

More than 1000 people in a garment factory in Sri Lanka were diagnosed; Indian textile factories were unable to deliver goods normally due to the epidemic situation, and many orders were transferred to China; the sales volume of "double-digit" in Mid Autumn Festival in many places increased by double-digit; and 250 stores were planned to be closed in 2021 by H & M.