Half Month Up 10%, A-Share Textile And Clothing Plate Strong Rebound, Only Because Of The Return Of Indian Orders?

Guide: in addition to the return of orders from India, the brand terminal continues to recover, and the cold winter is favorable for the sales of winter clothes, all of which are helping the textile sector to soar.

Entering autumn, the traditional fashion season for foreign trade is coming, even this year, which has experienced the epidemic situation, is no exception.

October 15, Thursday, A-share textile manufacturing plate continued to rise. Jujie microfiber, Huafang Co., Ltd., Xinye Textile Co., Ltd., and Bailong Oriental Co., Ltd.

Since the end of September, textile sector has soared. According to wind, the textile and clothing index has risen by 9.6% since September 30.

On the face of the news, India's epidemic situation is still fierce, textile industry has suffered heavy losses, shutdown and delivery difficulties. As a result, many European and American retailers cancel orders in large quantities and transfer those orders originally produced in India to China.

According to the first finance and economics report, among the orders transferred from India to China, the orders for towels, bed sheets and other products are relatively large. Some factories receiving "return" orders from India expect that the current order quantity has been arranged to may 2021.

In this regard, Li Xingqian, director general of the foreign trade department of the Ministry of Commerce, said at a media communication meeting yesterday that China is the world's largest textile producer and exporter, and labor-intensive products have obvious export advantages. It is normal market behavior for multinational companies to adjust order production globally and for international purchasers to select suppliers based on their production capacity. China took the lead in resuming work and production, which effectively guaranteed the supply of the international market and supported the smooth operation of the supply chain of the international industrial chain.

In the view of Zhang Xiang and sun Haiyang, the analysis teachers of Tianfeng securities, China has the whole industry chain of textile industry, and has strong control over the epidemic situation. The resumption of work and production of each factory is carried out in an orderly manner, which can undertake a large number of textile orders. Moreover, the domestic cotton price is relatively low, and the cost advantage of raw materials is obvious.

Therefore, China has vigorously accepted the transfer of Indian orders, which is also good for the rapid recovery of textile manufacturing industry in the short term.

In the first half of the year, due to the impact of the epidemic situation, the upstream textile enterprises were affected by the delay in resuming production and the loss of orders, and their performance declined significantly; in the second half of the year, with the gradual recovery of downstream terminal demand, the order and capacity utilization rate continued to recover; superimposed on the transfer of Indian orders to China, the textile enterprises' production capacity was accelerated. From the recovery of domestic enterprises, according to our tracking, the capacity utilization rate of upstream enterprises continued to recover in the third quarter, and the orders were in good condition. After entering the peak season in the fourth quarter, it is expected that the overall capacity and order situation will continue to recover.

However, is the strong rebound of textile and garment just because of the return of India?

Tianfeng Securities believes that the textile industry brand terminal continues to recover, cold winter is good for winter clothing sales, the plate's current valuation is low, but it is expected to fully recover in the fourth quarter.

From the perspective of downstream brands, offline terminals continued to recover; from the perspective of online channels, all brands continued to maintain a relatively rapid growth, and the data of the National Day golden week were brilliant, opening the Q4 winter clothing sales peak season. At the same time, due to the influence of La Nina phenomenon, China's winter 2020-2021 is expected to be cold winter. From the perspective of the National Day golden week, the temperature of the whole country dropped by 4 ~ 5 ℃, and the temperature in the northern region dropped more obviously, which was good for the sales of down jacket in winter. We believe that the base number of 19q4 is relatively low due to the influence of warm winter; the cold winter catalysis of 2020q4, and the winter clothing sales are started in some areas in advance; meanwhile, the Spring Festival of 2020-2021 is in the middle of February, which is later than the Spring Festival in 2019-2020, and the winter clothing sales season is lengthened. We believe that Q4 brands are expected to continue to recover.