Shenwan Hongyuan Securities·2025-03-30 13:12Investment Rating - The report maintains a positive outlook on the textile and apparel industry, indicating potential for growth driven by domestic demand recovery and favorable policies [2]. Core Insights - The textile and apparel sector has shown mixed performance, with domestic brands leading growth, particularly in sportswear. Li Ning reported a revenue increase of 3.5% to 28.68 billion RMB, while net profit decreased by 5.5% to 3.013 billion RMB [5][11]. - The report highlights the resilience of domestic brands and anticipates a rebound in consumer demand in 2025, supported by government policies aimed at boosting domestic consumption [5][11]. - The textile manufacturing segment is expected to benefit from a recovery in the economic cycle, with companies like Shenzhou International and Weixing showing significant growth in their financial results [12][13]. Summary by Sections Industry Performance - The textile and apparel sector underperformed the market, with the SW textile and apparel index declining by 2.4% from March 24-28, lagging behind the SW All A index by 1.0 percentage points [6]. - Retail sales for clothing and textiles totaled 262.4 billion RMB in January-February, reflecting a year-on-year growth of 3.3% [27]. Company Performance - Shenzhou International reported a revenue of 28.7 billion RMB for 2024, a year-on-year increase of 14.8%, with net profit rising by 36.9% to 6.24 billion RMB, marking a historical high [12][23]. - The report notes that the women's clothing segment is still adjusting, with companies like Yinger Fashion and Taiping Bird experiencing revenue declines of 5% and 13%, respectively [11][12]. Market Trends - The report emphasizes the importance of domestic demand recovery as a key driver for growth in 2025, with a focus on high-quality domestic brands and new market opportunities in outdoor and children's apparel [11][12]. - The textile manufacturing sector is witnessing a transformation with the emergence of new production capabilities and materials, indicating potential for significant market opportunities [13]. Recommendations - The report recommends investment in various segments, including sports and outdoor brands like Anta Sports and Bosideng, as well as textile manufacturers such as Shenzhou International and Weixing [5][11].