Investment Rating - The report maintains a positive outlook on the textile and apparel industry, indicating a "Buy" recommendation for the sector [1]. Core Insights - The recent US-China trade talks have reached a positive consensus, which is expected to catalyze a recovery in market expectations for the textile and apparel sector [3][9]. - The textile and apparel sector outperformed the market, with the SW textile and apparel index rising by 1.0% from May 12 to 16, surpassing the SW All A index by 0.4 percentage points [4]. - Recent industry data shows that from January to March, the total retail sales of clothing, shoes, hats, and textiles reached 386.9 billion yuan, a year-on-year increase of 3.4% [3][30]. - Exports of textiles and apparel from January to April amounted to 90.5 billion USD, a year-on-year increase of 1.1%, with textile yarns, fabrics, and products seeing a 4% increase [3][30]. Summary by Sections Textile Sector - The textile sector is expected to benefit from a recovery in shipping expectations to the US market, with potential for excess orders to be filled during the tariff suspension window [9]. - Major manufacturers like Huayi and Shenzhou have established independent dual-circulation production layouts, making them less affected by tariffs, which could lead to a return of growth valuation premiums [9][11]. Apparel Sector - The central bank's report emphasizes the need to support and expand consumption, which is crucial for stabilizing growth amid weakening external demand [11]. - The sportswear segment continues to lead retail performance, with brands like Anta and 361 seeing significant growth in sales [11]. - The report highlights a divergence in performance among apparel categories, with some brands like Hailan Home and Luolai showing strong profit recovery [11]. Market Dynamics - The report notes that the domestic cotton price index rose to 14,474 yuan per ton, an increase of 2.5%, while international cotton prices showed mixed trends [3][34]. - The textile export performance in April showed a total of 24.2 billion USD, with textile products increasing by 3.4% year-on-year, while apparel exports slightly declined [10][30]. Recommendations - The report suggests focusing on high-quality domestic brands that are poised for recovery, particularly in the sports and outdoor segments, as well as home textiles and children's clothing [11][12]. - Specific companies recommended include Anta Sports, Luolai Life, and Huayi Group, among others, indicating a strategic focus on brands with strong fundamentals and growth potential [11].