“Investors Network” Jordan

The Spring Festival has always been an important time for sales in industries such as apparel, gold and jewelry. The pulse and trends of the market were particularly evident during this period. Major clothing brands have launched new year collections filled with a festive atmosphere, adding a touch of color to the holiday season with auspicious designs. At the same time, industries such as gold and jewelry have also ushered in a peak sales season.

At the same time, the Spring Festival period is also an important point for many listed companies to reveal their performance. So, what are the notable trends in the market industry during this period? How are the major brands performing?

Dragon elements are popular in the market

At the beginning of the new year, Longteng Ruiqi, Vientiane was renewed, and the market was ushered in a unique “Year of the Dragon” fashion feast. The “Investor Network” survey revealed that major gold stores have launched all kinds of “dragon zodiac” gold jewelry, and clothing stores in shopping malls have also launched creative “dragon element” New Year costumes. The main color is red, which cleverly incorporates traditional dragon elements, injecting vitality and color into the holiday market.

At the clothing store in Wuhan's Qunguang Plaza, “Investor Network” found that “Dragon Element” clothing from many famous clothing brands is loved by consumers. Some dragon motifs on adult costumes show majesty, strength and wisdom; others are auspicious and support people's best wishes for the New Year. The dragon pattern on children's costumes is more cute and lively, which is in line with children's aesthetic interests.

Consumer Ms. Chen displayed her newly purchased “dragon element” costume with joy. She told “Investor Network”: “This year is the Year of the Dragon. Wearing these clothes with the 'dragon element' not only made me happy, but also made me feel happy. These are not only good wishes for the new year, but also my expectations for a better and better future for my family.”

The sales staff in the store said that the launch of these “dragon element” clothing not only met the consumer needs of the holiday market, but also reflected the brand's respect and innovation in traditional culture. By cleverly combining traditional elements with modern design, these garments not only enhance the brand image, but also satisfy consumers' pursuit of personalization, fashion and culture.

Many listed companies have also followed the trend and launched the Dragon Element series of products. Hongdou Co., Ltd. (600400.SH) released the “Dragon Xing Yu Long Zeling” comfortable underwear products, including red warm suits, underwear, socks, etc., to provide users with a variety of quality matching options. At the same time, sports brands such as Anta Sports (02020.HK) and Li Ning (02331.HK) have also launched dragon element sneakers and clothing, various sweatshirts, shoes, children's New Year's greetings, etc., which cleverly combine traditional culture with modern design.

The manager of an Anta specialty store told “Investor Network” that the market performance of these “dragon element” clothing also further proved consumers' sense of identity with traditional culture and auspicious meaning. On the special occasion of the New Year, people prefer to choose auspicious and culturally rich clothing to celebrate the holiday season, which also provides more market opportunities and development space for brands.

In addition to the dragon element costumes mentioned above, the gold market has also ushered in a “gold rush” frenzy. The Spring Festival is the peak season for gold sales. Strong demand for returning home, visiting family and friends, and gift-giving makes the gold market very lively. This year, combined with people's special love for the Year of the Dragon zodiac, the popularity of the gold jewelry market with the theme of the Year of the Dragon has reached a new peak.

Many banks, such as Bank of China (601988.SH), Bank of Communications (601328.SH), and China Construction Bank (601939.SH), etc., have launched gold products made of the Year of the Dragon on their apps. These gold jewellery are exquisite in craftsmanship, stylish in design, and also incorporate cultural connotations, satisfying consumers' pursuit of Chinese zodiac gold jewelry.

The China Gold (600916.SH) store on Jianghan Road in Wuhan was crowded, and there was an endless flow of customers shopping for gold. “Investor Network” discovered that young consumers actually occupy most of the country. They have a soft spot for the novel and stylish Year of the Dragon gold jewelry.

The counter staff explained, “A lot of gold jewelry, especially those with the Chinese zodiac sign for the Year of the Dragon, are selling very well.” A young customer excitedly said, “I really love this Year of the Dragon zodiac pendant. Not only is it unique in design, but it also means good fortune, making it a perfect New Year gift for family and friends.”

Soaring performance to welcome the Year of the Dragon

The Spring Festival is also an important point for many listed companies to reveal their performance. From the performance forecast, we can get a glimpse of the industry's recovery in 2023. Most branded apparel companies achieved double-digit growth from a low base in 2023 or the fourth quarter, while profit margins were steadily restored.

By sector, high-quality menswear brands not only achieved rapid year-on-year revenue growth, but also surpassed the same period in 2021 in terms of revenue. Behind this achievement, on the one hand, it is due to the company's continuously optimized cost control strategy, and on the other hand, it is also due to healthy inventory conditions, which provided strong support for the increase in gross margin.

Specifically for the company, Baoxiniao (002154.SZ) expects net profit to increase by 50%-60% year-on-year in 2023, and net interest rates will recover significantly; in addition, according to data disclosed in the Guoxin Securities Report, Biyin Levin (002832.SZ) expects revenue growth of 28% in the fourth quarter and a slight increase in net interest rate, achieving double-digit growth over the same period in 2021; Heilan House (600398.SH) expects revenue growth of 26% year-on-year in the fourth quarter, slightly higher than the same period in 2021. 22%

Guoxin Securities also said that in the field of women's clothing and casual wear, brands such as Dipu Fashion (603587.SH), Samma Apparel (002563.SZ), and Peacebird (603877.SH) achieved year-on-year double-digit growth at a low base, but have not yet returned to the level of the fourth quarter of 2021. However, under an active store opening strategy, Golix (603808.SH) achieved a good revenue growth rate compared to both 2022 and 2021, but profit margins were dragged down by factors such as store expenses, declining revenue from overseas business, and impairment of goodwill.

In terms of sports brands, the industry continued its weak recovery trend in the second half of 2023. Although the industry's inventory handling intensified competition in the fourth quarter, brands such as Anta Sports, Tep International (01368.HK), 361 (01361.HK), and Taobo (06110.HK) are still expected to maintain steady growth, while Li Ning is under some pressure.

Guoxin Securities pointed out in the report that Anta Sports expects revenue growth of 19% in the second half of the year. This significant increase was mainly due to the company's successful optimization of the cost structure, which significantly increased the operating margins of FILA and other brands, which in turn contributed to a 26% increase in net profit. In addition, Teb International also expects revenue growth of nearly 10% in the second half of the year, mainly due to the year-on-year narrowing of the company's discount policy, which effectively boosted the increase in gross margin, thus achieving a 13% year-on-year increase in net profit.

Meanwhile, 361 degrees also expects revenue growth to reach 19% in the second half of the year, showing a strong growth momentum. Taobo expects revenue to increase by 12% in the second half of the fiscal year. Along with the increase in gross margin, net profit is expected to increase by 32%.

Meanwhile, Bosideng (03998.HK) expects revenue growth of 22% in the second half of the fiscal year due to outstanding performance in the fall and winter season. The decline in the company's rigid expense ratio has created favorable conditions for the increase in net interest rates, and net profit is expected to increase by 26%.

In contrast, Li Ning's revenue is expected to remain basically flat in the second half of the year. Despite proper discount control, gross margin remained stable, but under the influence of operating leverage, net interest rate declined sharply, resulting in a 46% year-on-year decline in net profit.

Analysts at Guoxin Securities believe that the trend of improving the fundamentals of manufacturing enterprises is clear. Benefiting from the drop in winter temperatures and the late Spring Festival, the apparel industry ushered in a long peak sales season. They are optimistic that brands will make active efforts during this peak season to drive sales growth and further consolidate the industry's recovery trend.

At the same time, as another popular category during the Spring Festival, gold also attracted market attention. According to the forecast of Guojin Securities, the overall performance expectations for the gold sector in 2023 are optimistic, and many leading companies are expected to achieve significant growth.

Among them, China Gold is expected to successfully achieve the target of a profit growth rate of 20% or more, and Zhou Dasheng (002867.SZ) also expects to achieve the target of a profit growth rate of 25% or more. Chao Hongji (002345.SZ) expects annual profit to reach about 400 million yuan, while Caibai Co., Ltd. (605599.SH) also expects annual profit to reach 7-750 million yuan. These positive performance expectations not only reflect the strong performance of the gold industry in the market, but also indicate that the gold industry will continue to maintain a strong growth momentum in future development. (Produced by Thinking Finance) ■