RCEP: New Textile And Garment Engine

Recently, ten ASEAN countries, as well as 15 countries including China, Japan, South Korea, Australia and New Zealand, formally signed the regional comprehensive economic partnership agreement (RCEP), marking the formal conclusion of the largest free trade agreement in the world.

Analysts pointed out that on the industry level, with the regional trade of RCEP active, the port shipping sector, which suffered from slow global economic growth and trade conflicts in the past few years, will usher in a turnaround. RCEP agreement will speed up the free flow of goods trade in the region, and the port and shipping sector will usher in a new growth engine. In addition to port and shipping related beneficial sectors are generally optimistic, the signing of RCEP will also promote China's export of light industrial products in the region, as well as cross-border e-commerce, textile and clothing, home appliances, toys and other industries.

Port shipping

New growth engine

RCEP parties account for a high proportion of global population and GDP. In 2019, the total population of 15 RCEP parties will reach 2.2 billion, accounting for 30% of the world's total population. The GDP of 15 member countries will reach 25.6 trillion US dollars, accounting for 29.3% of the total global economy. The intra regional trade volume is 10.4 trillion US dollars, accounting for 27.4% of the total global trade. After the RECP comes into effect, it will promote the realization of high-level trade liberalization in the region, and gradually implement tariff liberalization. More than 90% of tax items will be subject to zero tariff, which will greatly promote the import and export trade between the contracting parties.

Since China's entry into WTO in 2001, China's port throughput has entered a stage of rapid growth. From 2001 to 2007, China's coastal port cargo throughput grew at a compound annual rate of 20%; since the global financial crisis in 2008, the global economic growth has been slow. From 2010 to 2016, the annual compound growth rate of cargo throughput of China's coastal ports was 7%. Huatai Securities analyst Shen Xiaofeng predicted that with the signing of the RCEP agreement, the port shipping sector is expected to usher in a new growth engine.

China is the largest shipping country in the world in terms of shipping volume and shipping volume. China is the largest country in the world in terms of shipping volume and shipping volume COSCO Haifa, both international and COSCO, which is mainly engaged in ship and container leasing, can benefit. Port foreign trade goods account for about 31%, which is in the digestion period of production capacity as a whole. It can quickly accommodate the increase of import and export trade, and the leading ports such as Shanghai Port Group, Ningbo port and Guangzhou port will benefit directly.

Selection of potential stocks

COSCO Haikong (601919) is in the recovery period

The main business of the company includes container transportation and port business. At present, the transportation capacity of the company ranks the third in the world. After the successful acquisition and integration of OOCL in 2018, the airline network was further upgraded and optimized, and the synergy effect was enjoyed in the customer side. In the upward cycle of consolidation transportation, we refer to the historical profit and stock price elasticity of OOCL for the second round. In the range of continuous upward freight rate, the operation flexibility of container transportation stock is large. Domestic companies will complete the equity incentive plan in 2019, and the exercise requirements are in line with the business operation, and release the operational efficiency and vitality of state-owned enterprises. Dongfang Securities pointed out that in the past five years, after the merger and reorganization of the industry and the operation of the alliance, the industry concentration has been further improved. Under the crisis of the industry epidemic this year, the consolidation and transportation companies have suspended shipping, reduced transportation capacity, guaranteed freight rates, comprehensively judged the substantial improvement of the competition pattern of the freight transportation industry, and entered the profit recovery period.

Shanghai Port Group (600018) continued to rebound

Relying on the Yangtze River Delta and the Yangtze River basin economic hinterland, the company has formed the main hub port status radiating Northeast Asia economic hinterland. The company is the largest port joint-stock enterprise in China, and is a comprehensive port with cargo throughput and container throughput ranking in the forefront of the world. Huatai Securities pointed out that since the second quarter, the company's port business volume has increased significantly compared with the first quarter. Since then, the company's container throughput reached a record high of 3.9 million containers in March, reaching a record high of 3.9 million containers. As the world's largest container port, we are optimistic about the company's medium and long-term development and maintain the "buy" investment rating. The long-term development of Hong Kong's free trade zone will benefit from the development of Shanghai's free trade zone and other industries.

Ningbo port (601018) keeps its leading position

The company raised no more than 11.215 billion yuan in non-public offering, mainly used for wharf construction, berth reconstruction, asset purchase, supplement of working capital and repayment of bank loans. The application has been approved by the CSRC. Donghai Securities pointed out that after the implementation of the project, about 5.55 million TEU Container capacity, 3 ore berths, 20 million tons of ore throughput, 26 tugboats and bridge cranes and other equipment are expected to be added. With the improvement of handling capacity and loading and unloading scale, the business layout is gradually reasonable, and the operation strength of the company in the Yangtze River Delta region is further strengthened, which helps to promote the company's strategy and consolidate its leading position in the world's ports for 11 consecutive years. At the same time, the introduction of Shanghai Port Group as a strategic investor and the integration of port assets of all parties will further promote the coordinated development of ports in the Yangtze River Delta.

Sinotrans (601598) global integrated logistics leader

The core business of the company is professional logistics, including contract logistics, project logistics, chemical logistics and cold chain logistics. The integration cost of the company with investment promotion logistics has been reflected in the past three years, and the current trend is upward. CICC pointed out that the upgrading of manufacturing industry in the next decade is expected to generate a large number of professional logistics demand, and logistics leaders are expected to increase their market share with upstream industries. The compound growth rate in 2016-2019 is 7.5%, and we expect to maintain an endogenous growth rate of nearly 10% in the long term. In addition, the company's freight forwarding business ranked first in China, and the profit margin and market share were gradually improved. At present, the company transforms the original decentralized service into a standardized product system, and optimizes the product performance through digital means, so as to increase the service added value and increase the profit. It is expected that the company will continue to achieve a year-on-year growth rate of more than 10% in the future.

Textile clothing

Industrial structure adjustment and upgrading

RCEP will effectively enhance the trade and investment exchanges among its members, enhance the vitality of regional trade, and is expected to promote the optimization of regional resource allocation and the adjustment and upgrading of domestic textile upstream industrial structure. Zhang Xiang, an analyst teacher of Tianfeng securities, pointed out that China, as the world's largest textile exporter, has the advantages of the whole industrial chain production, and has advantages in industry research and development, high added value, fast response and short delivery time, and complex product orders; On the other hand, Southeast Asia's overseas labor cost advantage is significant, and the tariff advantage between Southeast Asia and the EU North American market takes the lead. Part of China's domestic textile manufacturing capacity is transferred to Southeast Asia, and the RCEP regional trade cooperation is closer. The unified origin principle of RCEP will bring convenience to China's clothing enterprises in terms of suppliers, logistics and customs clearance.

From the perspective of industry fundamentals, brand clothing established an upward turning point in the third quarter, and the operation quality was significantly improved. Textile manufacturing report in the third quarter continued to bear pressure, but orders have been improved, and the fourth quarter is expected to gradually recover. Shi Hongmei, an analyst at Dongfang securities, said that he was optimistic about the opportunities for excess earnings of leading brand companies under the logic of plate recovery. On the one hand, from the perspective of prosperity, due to the earlier cooling this year and the late Spring Festival, the sales period of winter clothes has been lengthened as a whole. It is expected that the year-on-year growth rate of the overall sales of brand clothing is expected to further increase, with strong certainty to continue to improve; on the other hand, considering the valuation switch, the valuation of most of the leading segments in 2021 has returned to the bottom of the history, and the attraction has been further enhanced.

Wang Feng, an analyst with Huajin securities, said that the trend of online consumption continues. The fourth quarter is the peak season of traditional consumption, and the recovery of optional consumption is expected to continue. It is suggested that we should pay attention to the textile and clothing leading companies with low valuation, such as SEMAR clothing, bosden, Antarctic e-commerce, roleigh life, fuana and Jiansheng group.

Selection of potential stocks

SEMAR clothing (002563) performance recovery is expected

The company successfully divested kidiliz, reduced the operational risk and embarked on the battle with light equipment. The second phase of ESOP covers senior executives and key employees to enhance the overall employee confidence. Adult leisure introduces former Nike director to reposition brand and improve influence. Under a series of measures, after the establishment of the bottom under the influence of the epidemic situation and kidiliz, SEMA has ushered in a turning point and its performance recovery is expected. Guotai Junan Securities pointed out that the company's two major brands of leisure children's wear are in the leading position in the industry, and the income and profit have increased steadily. The market potential of children's wear is great and the market share tends to be concentrated to the leaders. The proportion of Balabala city is 6.9%, ranking first. The industry leader has obvious advantages, and the brand matrix is gradually improved. Leisure clothing focuses on supply chain reform, brand building and product upgrading, and the income of leisure clothing is stable. With the continuous optimization of various brands, the company's performance is expected to reach a new high.

Antarctic e-commerce (002127) has the advantage of first mover scale

In recent years, the company has continuously acquired other brands. At present, its main brands include Antarctica, Cartier crocodile, Jingdian Teddy, etc. the authorized operation categories cover underwear, bedding, men's, women's, children's clothing, mother and baby, healthy life, etc. Northeast Securities pointed out that the company has rich experience in Internet operation and advantages of first mover scale. It integrates the industrial chain by using the brand advantages established in the early stage, integrating scattered production capacity in the upstream and scattered flow in the downstream. Taking full advantage of big data enabling, the company independently developed the data management tool Antarctic digital cloud around the Antarctic e-commerce platform to provide digital guidance to supply chain partners. The company continues to acquire and expand product categories, cover more customer groups, and create a multi gradient brand matrix. At the same time, actively explore new channels such as pinduoduo and vipshop to maintain the rapid growth of Gmv.

Raleigh life (002293) will achieve positive growth

After more than two years of brand adjustment in the company's online business, rolai and LoVo brands have formed their own clear style positioning, and the online business grew rapidly in the third quarter. The main brand rolai is distinguished from LoVo and other competitive brands with high quality and high unit price. Lovo brand, the company continues to promote the brand building, clear young fashion trend home textile positioning, focusing on young consumer groups. At the same time, in October this year, the company's official publicity top stream star Yi closed Qianxi as the company's spokesperson, which is expected to bring more younger attention and traffic to the brand in the future. Huajin Securities pointed out that the company as a whole has basically got rid of the impact of the epidemic, with strong performance in the third quarter, high-speed growth of online business, optimization of organizational structure at the beginning of the year and continuous improvement of profitability. It is optimistic that the annual performance will achieve positive growth.

Jiansheng group (603558) two wheel drive growth

The company is China's largest and leading cotton socks manufacturer in the world. In 2017, it acquired Qiaoer Tingting to enter the seamless industry and realize strong alliance. The company's performance maintained steady growth, and the internal flow of orders promoted the recovery of performance. Shenwan Hongyuan Securities pointed out that the company is a leading weaving enterprise in the world, driven by cotton socks and seamless business, overseas production capacity continues to expand, and the inflection point of order reflux catalytic performance appears. The company is gradually transforming from a traditional OEM enterprise to a core supplier, deeply binding UNIQLO, Decathlon, puma, Nike and other international famous brands to become its core supplier. At the same time, actively cut into the sports industry chain and enjoy the industry dividend, which is expected to maintain high growth in the future. In the near future, a large number of domestic textile orders are expected to recover rapidly due to the domestic epidemic situation.

Cross border E-commerce

Strengthening competitive advantage

The signing of RCEP marks the start of the construction of East Asia free trade zone. With the gradual release of policy dividends such as tariff reduction, cross-border logistics efficiency improvement and exchange rate stability, export cross-border e-commerce and other related industries are expected to benefit significantly. Some analysts pointed out that the signing of RCEP has effectively strengthened the trade cooperation between China and other countries. With the release of various policy dividends, it is expected to help improve the customs clearance efficiency of China's export commodities at the customs of the destination country, add to the construction and use of overseas warehouses and strengthen local logistics cooperation, greatly improve the cross-border logistics efficiency, shorten the logistics time, and improve the shopping experience of consumers, so as to promote Export cross-border e-commerce and other trade related formats are booming.

Since this year, the change of China's cross-border e-commerce mode has also brought stronger competitive advantages to the industry. Zhao Xiwen, an analyst of new era securities, pointed out that under the influence of the epidemic this year, China's cross-border e-commerce mode has changed from B2B mode to M2C mode, which has brought stronger relative competitive advantage. Under the background of the expected improvement of export expectation, the reconstruction of cross-border e-commerce mode and the surge of demand for home office in the epidemic situation, China's top brands show a high cost-effective and smooth growth logic and certainty Unit price and profitability continue to recover.

Cross border e-commerce is a more efficient export mode, which is accelerated under the stimulation of favorable factors such as the rapid increase of global e-commerce penetration rate during the epidemic period. In the three dimensions of cross-border e-commerce, we are optimistic about the development of e-commerce in three dimensions, namely, good brand development and balanced development. In terms of opportunities, Jihong shares, Anke innovation, Jiacheng international, millway, Huamao logistics and other stocks are generally optimistic by industry analysts.

Selection of potential stocks

Jihong shares (002803) enjoy regional flow dividend

The company is a leading company in the field of FMCG packaging. It has expanded its business to cross-border e-commerce and become an Internet marketing giant. In terms of cross-border e-commerce, it is necessary to build a large-scale cross-border e-commerce platform based on high-quality e-commerce platforms and consumer profiles. At present, the main focus of cross-border business is in Southeast Asia, fully enjoying the local Internet and traffic dividends. It is expected that the company will enjoy the advantages of high-efficiency and high-efficiency e-commerce in Southeast Asia based on the advantages of the company's high-efficiency marketing and high-efficiency investment in the industry Market.

Anke innovation (300866) company adds growth pole

The company is one of the largest overseas consumer electronics brand enterprises in China, focusing on the design, development and sales of intelligent accessories and intelligent hardware. The company's online B2C platform sales business relies on the third-party e-commerce platform and its own platform. North America, Europe and Japan are the company's three major markets. Anson Securities pointed out that the company is the leading cross-border export of consumer electronics in China, and its main categories of charging / wireless audio / intelligent innovative products have strong growth potential in the short term, and they will lay out innovative products through continuous R & D investment; With the steady increase of global online rate, the company's online channels maintain rapid growth, and actively expand global offline channels to further consolidate brand power and create growth points; meanwhile, it plans to increase the layout of domestic market, with the domestic consumption upgrading and the demand for innovative consumer electronics increasing significantly, it is expected to add another growth pole for the company.

Jiacheng International (603535) has entered a period of rapid growth

The core competitiveness of the company lies in its rich international logistics experience and its scarce location in Nansha. In terms of business capability, the company has provided import and export logistics services for Panasonic and other international manufacturing giants since 2004, and has accumulated a lot of experience in cooperation with the customs. All data interfaces can be connected with the customs and accept the comprehensive supervision of the logistics sites by the customs. Tianfeng Securities pointed out that the company has scarce resources in Guangzhou, the most developed province of cross-border e-commerce in China. At the same time, the company has rich international logistics experience and complete qualifications for cross-border e-commerce import and export logistics services, and has formed deep cooperation with local customs and Taoxi e-commerce. In the future, with the release of Jiacheng phase II and phase III capacity, the company is expected to enter the double-click stage of demand and supply, and its performance will enter a period of rapid growth.

Huamao logistics (603128) benefited from rapid increase in source of goods

The company has the first mover advantage, the international freight forwarding industry is relatively scattered, the top five only account for 3% - 5% of the market share. The company is expected to become a global leader in the management and control of freight forwarding, and it is expected to become a global leader in talent management and management. Shenwan Hongyuan Securities pointed out that in the cross-border e-commerce mode, the main customers are small b-end and C-end customers, and the logistics provider's option is in China's local cross-border e-commerce enterprises. Compared with the traditional trade, the cross-border e-commerce supply is more fragmented, pursuing short frequency and fast, personalized demand is much higher than traditional foreign trade contract logistics, and the gross profit rate is higher than that of traditional trade. The price per ton of cross-border e-commerce business of the company is 1.9 times of that of traditional air transportation, and the gross profit is 19%, which is higher than the level of 12% of the traditional air freight forwarder. With the rapid increase of cross-border e-commerce supply, the profit growth center is expected to go to a higher level.