Shanxi Securities·2025-05-19 09:05Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the textile and apparel industry [1]. Core Insights - On Running reported a revenue of 727 million Swiss Francs in Q1 2025, representing a year-on-year growth of 43.0%, and a currency-neutral growth of 40% [2][17]. - The adjusted EBITDA for On Running in Q1 2025 was 129 million Swiss Francs, up 54.8% year-on-year, while net profit decreased by 38.0% to 56.7 million Swiss Francs [2][17]. - The DTC channel revenue grew by 45.3% to 277 million Swiss Francs, and wholesale channel revenue increased by 41.5% to 450 million Swiss Francs in Q1 2025 [3][17]. - The Asia-Pacific region showed significant growth, with a revenue increase of 130.1% to 121 million Swiss Francs in Q1 2025 [3][17]. - The footwear segment saw a revenue increase of 40.5% to 681 million Swiss Francs, while apparel and accessories grew by 93.1% and 99.2%, respectively [3][17]. Summary by Sections Market Performance - The SW textile and apparel sector rose by 1.01% this week, lagging behind the Shanghai and Shenzhen 300 index, which increased by 1.12% [19]. - The SW textile manufacturing sector's PE-TTM was 20.47, while the apparel and home textile sector's PE-TTM was 26.37, indicating high valuation levels [26]. Company Performance - On Running's gross margin in Q1 2025 was 59.9%, a slight increase of 0.2 percentage points year-on-year [18]. - The company expects a revenue growth of at least 28% in 2025, targeting 2.86 billion Swiss Francs, with a gross margin of 60%-60.5% [4][18]. Industry Data Tracking - In the first four months of 2025, China's textile and apparel exports amounted to 458.48 billion and 446.20 billion USD, reflecting a year-on-year growth of 3.8% and a decline of 1.5%, respectively [46]. - The domestic retail sales in March 2025 reached 4.09 trillion yuan, growing by 5.9% year-on-year, with textile and apparel sales increasing by 3.6% [55][56].