“Watching the weather and eating” is not only a characteristic of agriculture; even the clothing industry, which sells clothes all year round, now relies on “weather and location advantage” to create a favorable environment and conditions.

As far as the latter is concerned, the difference between a “cold winter” and a “cold winter” year without a “cold winter” is not one and a half stars.

In addition to the “selling season one year, one season at the top of the year,” in the capital market, the author has seen with my own eyes that many clothing chains, even the current few leading brands, all stand out from the “cold winter” of a certain year, and then enter a high-speed channel of development.

The industry I would like to call it”Cold Winter Rises” The law, which has been tried and tested over and over again, also has important reference significance for investors to uncover dark horses in the industry and recover dragons.

Next, we might as well follow this line of thought and explore the “Stars of Tomorrow”, a trendy apparel chain brand in the Hong Kong stock market.

Looking further at the many clothing brands, which one has become this year's breakthrough? GXG, the leading domestic fashion brand, has finally bucked the trend and outperformed many of its peers during this “cold winter”, and it is now its turn to be famous.

According to some data revealed by people familiar with the company, this fact or trend is further confirmed. Among many large-scale and influential online channel platforms, as of December 27, GXG's monthly target achievement rate in JD and the year-on-year growth rate of monthly retail sales achieved the best in its class.

It can be seen that GXG and its parent company Musang Group, which is listed in Hong Kong, have seized the opportunity of JD's popularity this winter, and have taken advantage of the opportunity to launch a number of super fashion item lines to consumers, rapidly increasing their online brand power and market influence.

At the same time, judging from the geographical layout of the provinces, GXG's parent company Musang Group also had a “geographical advantage” in this year's “cold winter” offensive. As of December 27, by province, GXG's offline channel sales in the three northeastern provinces increased by 106.9% year-on-year. Among them, offline monthly retail sales in Jilin Province increased 207.7% year over year, making it the fastest growing province among the three northeastern provinces.

As we all know, the three eastern provinces are colder places in China, and GXG sales achieved relatively rapid year-on-year growth. It may reflect the increase in product strength launched by GXG in this year's “cold winter”, and the characteristics of the new products are lighter and warmer have also been verified by sales.

This year, GXG fully invigorated the coat category and launched the GXG Zero Pressure Coat. In contrast, coats are decent, fit, lightweight and comfortable, and can bring refinement and decency to male consumers. Compared to conventional double-sided woolen fabrics, this fabric has a fuller and more delicate suede. It has a thick layer of thick fluff. For example, made of a coat that is equally warm, its total weight is only about 0.75 times that of the former.

At the same time, GXG launched zero-pressure down products that are more familiar to office workers, redefining modern commuter down. This product line has the characteristics of being lighter, warmer, and more comfortable. It is filled with high-quality Siberian goose down, and the overall down can be as light as 197g, less than the weight of an iPhone 14 Pro. At the same time, it uses non-traditional adhesive technology to reduce down stitching and enhance the sense of quality and style.

From another perspective, GXG is headquartered in Ningbo. Judging from earlier marketing activities, efforts in Chengdu, Wuhan, Changsha, Chongqing, Shenyang, Hangzhou, Nanjing, and Ningbo are biased towards southern cities. To a certain extent, the growth of northern cities means that the strategy of broadening sales channels and laying out core provinces and cities is beginning to bear fruit.

With the success of the Cold Winter Offensive, GXG's parent company, Musang Group, may be further improved in terms of profitability by continuing the trend of the first half of the year. According to the figure below, in the first half of this year, the company's various financial indicators showing its profitability were reversed significantly (year-on-year), helping the company to further return to its reasonable value in the capital market.

From a valuation perspective, the book value of the company's latest BV (BOOK VALUE) is about HK$759 million, which is about 70% higher than the company's latest market value in the secondary market. At the same time, given its outstanding performance in selling winter clothes online and offline in the last month of this year, you can keep an eye on the dips and keep a close eye on possible stock price reversals thereafter.

(Source: Company Semi-Annual Report)