According to statistics from the General Administration of Customs, in January and February 2024, China's export values were 307.74 billion US dollars and 22.08 billion US dollars respectively, +8.20% and +5.60% year-on-year respectively. The growth rate increased significantly compared to the previous period, and the export scale continued to expand.
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, they are expected to continue to seize overseas market share. As export demand gradually recovers, overseas inventory removal and companies actively explore their own brands and new customers, the export business growth of leading light industry exporters can be expected in the future. I am optimistic about companies with good downstream demand and strong bargaining power in the export industry chain.
Recommended attention: Haoyang Co., Ltd. (300833.SZ), Yiyi Co., Ltd. (001206.SZ). Beneficiaries also include Jianlin Home (603408.SH), Songlin Technology (603992.SH), Ingenious Home (301061.SZ), Zhiou Technology (301376.SZ), and Jiayi Co., Ltd. (301004.SZ).
The main views of Huaxi Securities are as follows:
At the level of China's export data:
According to statistics from the General Administration of Customs, in January and February 2024, China's export values were 307.74 billion US dollars and 22.08 billion US dollars respectively, +8.20% and +5.60% year-on-year respectively. The growth rate increased significantly compared to the previous period, and the export scale continued to expand. The cumulative export value for January-February 2024 was US$528.01 billion, a cumulative year-on-year increase of 5.5%. Export sentiment rebounded in January-February. Huaxi Securities is expected to be mainly due to a recovery in overseas demand and a lower base for the same period last year. Benefiting from the recovery in the sector, the overall performance of export sector companies in the first quarter is expected to improve.
US market demand and inventory tracking:
Overall, sales of newly built homes continued to recover in January and February, with 66.4 and 662,000 units, respectively, +2.3% and +5.9% (previous value +5.7%); the decline in existing house sales narrowed markedly, with sales of 400 and 4.38 million units in January and February, respectively, -1.7% and -3.3% year-on-year respectively. In terms of housing inventory, the inventory volume of existing homes in January and February was 1.01 million and 1.07 million units, respectively, +3.1% and +10.3% year-on-year, respectively.
In anticipation of subsequent interest rate cuts, US real estate is expected to continue to pick up. Looking at the retail market, inventory from various channels in January and February did not change much in the month before. Inventory removal continued, and the inventory sales ratio gradually fell back to pre-epidemic levels. Subsequent demand for stock replenishment is expected to drive export orders to continue to recover.
Furthermore, in January and February '24, sales in the US market as a whole showed an upward trend, and the increase was slightly higher than in the previous month. Overall, the US retail industry recovered upward in February, with strong resilience such as daily necessities and motor vehicle parts, and durable goods such as furniture and building materials falling year on year. The growth rate improved slightly from January. Huaxi Securities is expected to gradually recover in the future as real estate stabilizes and inventory removal progresses.
China's light industry export breakdown data situation:
Overall, export data for mattresses, sofas, office furniture, PVC floors, thermos cups, spotlights, bathroom ceramics, etc. recovered markedly and continued to expand year-on-year. The growth rate of toothbrush exports was positive, pet food was removed significantly, and pet products improved markedly year-on-year. Huaxi Securities expects continued recovery in the future as inventory removal and overseas market demand recovers.
Risk warning
1) The recovery in overseas terminal consumption fell short of expectations; 2) Raw material prices continued to rise sharply; 3) The competitive pattern of the industry deteriorated; 4) Exchange rates fluctuated sharply.