Shenwan Hongyuan Securities·2025-05-06 07:15Investment Rating - The report maintains a "Positive" outlook on the textile and apparel industry, highlighting the resilience of the sports and outdoor segments [1]. Core Insights - The textile and apparel sector has shown mixed performance, with the SW textile and apparel index declining by 0.1% from April 25 to April 30, underperforming the SW All A index by 0.1 percentage points. The SW apparel and home textile index increased by 0.3%, outperforming the SW All A index by 0.3 percentage points, while the SW textile manufacturing index fell by 2.1%, underperforming the SW All A index by 2.1 percentage points [3][4]. - Key industry data indicates that the retail sales of clothing, shoes, and textiles totaled 386.9 billion yuan in the first quarter, reflecting a year-on-year growth of 3.4%. Textile and apparel exports reached 66.3 billion USD, a 0.6% increase year-on-year, with textile yarns and fabrics up by 4% and apparel down by 2% [3][34]. - Cotton prices have shown a downward trend, with the national cotton price index at 14,103 yuan/ton, down 0.7%, and international cotton prices also declining [3][36]. Summary by Sections Textile Sector - The textile manufacturing sector is experiencing performance divergence, with companies like Weixing showing high growth while others like Huali and Jiansheng report declines in net profit. High-quality stocks in the outdoor equipment supply chain, such as Zhejiang Natural, are seen as having significant rebound potential due to their limited exposure to the U.S. market and successful production ramp-up in Cambodia and Vietnam [10][11]. - The report emphasizes the importance of domestic demand recovery as a key investment theme for 2025, with a focus on high-quality domestic brands and new growth opportunities in outdoor and new consumption sectors [15]. Apparel Sector - The sports apparel segment is leading the market, with brands like Anta and FILA reporting significant year-on-year revenue growth of 65%-70%. Other brands like 361 Degrees also show double-digit growth, while Li Ning and Xtep report moderate growth. The home textile sector, particularly Luolai, has exceeded profit expectations [13][15]. - The report notes that the overall inventory levels in the sports segment are healthy, and discounting remains stable, indicating robust operational quality [13]. Market Dynamics - The report highlights the impact of U.S. tariffs on the textile manufacturing sector, suggesting that the cost burden will be shared among manufacturers, brand owners, and consumers. The long-term implications of the new tariff structure on global supply chains are expected to be significant, with a trend towards supply chain diversification and flexible production capacities [12][15]. - The report also discusses the performance of international apparel companies, noting that Skechers faced a 16% decline in sales in the Chinese market, attributed to increased competition and a slowdown in consumer spending [21][22].