GOLDEN SUN SECURITIES·2025-06-22 07:00Investment Rating - The report maintains a "Buy" rating for several key companies in the textile and apparel industry, including Anta Sports, Xtep International, and others, indicating a positive outlook for their performance [10][26][36]. Core Insights - Inditex, the parent company of Zara, reported strong performance in FY2025Q1, with revenue growth of 1.5% year-on-year to €8.3 billion, and a net profit increase of 0.8% to €1.3 billion, benefiting from strict cost control [1][15]. - The report emphasizes the importance of focusing on brands with solid fundamentals and quality, anticipating performance recovery and valuation increases in 2025 [3][22]. - The apparel manufacturing sector is expected to benefit from easing tariff policies, which may enhance company valuations [24]. Summary by Sections Inditex Performance - Inditex's FY2025Q1 revenue reached €8.3 billion, with a gross margin of 60.6% and a net profit of €1.3 billion, reflecting stable profit margins due to effective cost management [1][15]. - The company’s inventory as of April was €3.791 billion, up 6% year-on-year, indicating healthy inventory quality [17]. Long-term Growth Drivers - Inditex plans to optimize store productivity and expects a 5% year-on-year increase in average sales area per store from 2025 to 2026, alongside continued e-commerce growth [2][20]. Apparel and Footwear Sector - The report highlights the robust growth of sportswear brands, with a healthy inventory and discount levels, particularly in outdoor and running segments, which are expected to expand significantly in 2025 [3][22][25]. - Key recommendations include Anta Sports and Xtep International, with respective 2025 PE ratios of 17x and 10x, indicating strong growth potential [10][25]. Jewelry Sector - Chow Tai Fook's operating profit increased by 10% in FY2025, despite an 18% decline in revenue, attributed to product structure optimization and rising gold prices [9][37]. - The report suggests that companies with strong product differentiation and brand power are likely to outperform the industry in 2025 [4][23]. Textile Manufacturing - The easing of tariff policies is seen as a potential positive for the valuation of leading textile manufacturing companies, which are expected to maintain stable orders and shipments in the short term [24]. - Recommended companies include Shenzhou International and Huayi Group, with 2025 PE ratios of 11x and 14x, respectively [7][24].