Looking Back At The Overall Decline Of Clothing Enterprises' Performance In 2022, This Year'S Trend Is Expected To Improve

Several A-share clothing companies in China recently released 2022 performance forecasts. In the past year, the performance of garment enterprises closely related to people's "daily clothes" has generally declined. What risks and opportunities will the industry face in the new year?

According to the disclosed performance forecast, in 2022, the performance of A-share garment enterprises may be described as an overall decline. Statistics show that a total of 39 listed companies in the clothing sector have issued performance forecasts, including 23 loss making enterprises.

Among them, the biggest loss was Souyute, the former leisure wear head enterprise. The performance forecast shows that in 2022, while Soyute's operating revenue is expected to decline by 79.71% to 78.75% year on year, the net profit attributable to shareholders of the listed company is expected to lose 1.9 billion yuan (RMB, the same below) to 2.6 billion yuan.

On the basis of a loss of more than 400 million yuan in 2021, Meibang Clothing is expected to lose 720 million yuan to 780 million yuan in 2022. In addition to these leisure clothing enterprises, some enterprises that focus on fashion clothing and children's shoes and clothing also suffered from performance losses. This is because the stock price of "anti-virus concept" rose sharply, and Annell expected a loss of 230 million yuan to 270 million yuan last year.

There are also some enterprises whose profit growth has declined significantly, although their performance has not yet suffered losses, such as the famous "Two Birds" in the A-share clothing sector. Among them, Guirenniao is expected to achieve a net profit of 74.7692 million yuan in 2022, a year-on-year decrease of 79.27%. Taipingbird is expected to achieve a net profit of about 195 million yuan in 2022, a year-on-year decrease of about 71%.

As for the reasons for the changes in performance, most enterprises said that the repeated outbreaks of COVID-19 had increased the company's operating difficulties and caused the company's sales revenue to decline. However, driven by the optimization and adjustment of China's epidemic prevention policies and various policies to expand domestic demand and restore the economy, with the gradual improvement of market vitality, it is expected that market sales will also gradually recover.

Among the "only three" enterprises that have made up their losses, Jihua Group expects to achieve a net profit attributable to shareholders of listed companies of 180 million yuan to 222 million yuan in 2022, which will turn losses into profits compared with the previous year. As for the main reason for the performance change, Jihua Group explained that the company focused on the main business of the entity, and the contracting volume of military supplies orders and epidemic prevention emergency supplies orders increased significantly year on year, and the gross profit increased year on year.

In the opinion of Hao Shuai, an analyst of BOC Securities, 2022 is a challenging year for the clothing sector, and the COVID-19 epidemic throughout the year has repeatedly affected terminal consumption. In 2022, the overall discount of brand clothing companies will increase, which will also affect their performance.

Looking forward to 2023, Wang Liping, an analyst of Shenwan Hongyuan Securities, is optimistic about the clothing sector. Wang Liping analyzed that, from the perspective of tracking the recent terminal sales of domestic clothing brands, the consumption recovery trend is obvious. Since January, brand clothing sales have continued to improve, the inventory structure has accelerated and optimized, and the discount pressure has eased. With the improvement of fundamentals, the industry is expected to usher in the "Davis Double Click" market.

Wang Feng, an analyst at Shanxi Securities, said that for the clothing sector, offline passenger flow has rebounded rapidly since 2023, and the industry inventory has continued to decline, which is conducive to the recovery of clothing consumption and the restoration of the profitability of clothing enterprises this year. In the medium and long term, sportswear is still the best category for growth. Under the background that young consumers are more interested in domestic sports brands and domestic sportswear companies are increasing their product research and development efforts, the market share of relevant sportswear companies is expected to continue to increase.

(Source: China News Network)