With the gradual recovery of export demand, the removal of overseas inventories and the accumulation of various companies actively developing independent brands and new customers, the export business of leading light industry exporters can be expected to grow in the future.
The Zhitong Finance App learned that Huaxi Securities released a research report saying that with their integrated global industrial chain layout, perfect supply chain, efficient organization and management capabilities, mature production technology, stable and strong channel power and high-quality customer resources, and at the same time benefiting from some export policy dividends, it is expected that China's light industry overseas enterprises will continue to seize overseas market share. As export demand gradually recovers, overseas inventory removal is superimposed, and various companies are actively developing their own brands and new customers. The export business of leading light industry exporters can be expected to grow in the future. The bank believes that currently leading enterprises in the industry and overseas leaders with rich overseas OEM experience may benefit the most. Relevant beneficiaries include: Qisheng Technology (603610.SH), Ingenious Home (301061.SZ), Dream Lily (603313.SH), Gujia Home (), Minhua Holdings (01999), and Jiayi Shares (301004.SZ). 603816.SH
The main views of Huaxi Securities are as follows:
At the level of China's export data: The export scale declined slightly in October alone, and the export industry is in an upward cycle of slow recovery. According to statistics from the General Administration of Customs, in October 2023, China's export value was 299.13 billion US dollars, -6.4% year-on-year (previous value -6.2%); among them, the decline in household exports continued to narrow in October, and the value of China's furniture and parts exports in October was 5.26 billion US dollars, -5.8% year on year. The overall situation in the home sector is in line with the export situation.
US market demand and inventory tracking: Looking at market demand, sales of newly built homes in the US increased year on year and declined month on month in October '23, and existing home sales continued to slow; newly built home sales in the US in October '23 were 679,000 units, +17.7% (previous value +26.8%), -5.6% month-on-month; existing house sales in October were 3.79 million units, -14.6% yoy (previous value -15.4%), -4.1% month-on-month.
In terms of housing inventory, rising borrowing costs, repeated record high housing prices, and limited housing stock for sale, there is still a trend of slowing housing sales. Looking at the retail market, inventory in all channels in September did not change much compared to August. Dewarehousing continued, and the stock-sales ratio gradually fell back to pre-pandemic levels. Subsequent demand for inventory replenishment is expected to drive continued recovery of export orders. Furthermore, in September '23, the US market as a whole and sales across all channels showed an increasing trend, and the growth rate increased compared to August. The overall prosperity of the retail industry recovered relatively well in October. The year-on-year decline continued to narrow, and continued to improve from September. The restoration of non-durable goods such as health care and personal care and motor vehicle parts was obvious, while durable goods such as furniture and building materials are still in the grinding stage. It is expected that it will gradually recover in the future as real estate stabilizes and inventories are being destroyed.
China's light industry export segment data situation: Overall, export data for mattresses, sofas, etc. have all recovered, demand for pet food has clearly recovered, pet products are still under pressure, and the rest of the segments are still under pressure in the short term. The bank expects that with the removal of inventories and the slow recovery of demand in overseas markets, the bank is optimistic about future restoration.