Investment Rating - The textile and apparel industry is rated positively, with a focus on new growth directions due to the recovery of domestic demand in 2025 [2][10]. Core Insights - The textile and apparel sector underperformed the market recently, with the SW textile and apparel index dropping by 5.1% from June 16 to June 20, lagging behind the SW All A index by 3.9 percentage points [1][3]. - Recent industry data shows a 3.1% year-on-year increase in retail sales for clothing, shoes, and textiles, totaling 493.9 billion yuan from January to April 2025 [2][23]. - Exports of textiles and apparel from January to May 2025 reached 116.67 billion USD, a 1.0% increase year-on-year, with specific categories showing varied performance [2][27]. Summary by Sections Textile Sector - The textile export performance from China and Vietnam showed a decline in May, with China's textile and apparel exports amounting to 26.21 billion USD, a 0.6% year-on-year increase [7][27]. - The U.S. International Trade Court ruled against unilateral tariff increases, which may positively impact the textile sector by easing trade barriers [7][8]. - Short-term opportunities are identified in companies like Weixing and Xin'ao, which are expected to benefit from improved export conditions [8][10]. Apparel Sector - The 618 shopping festival reported significant growth, with Tmall's GMV increasing by 10% year-on-year and JD's user orders more than doubling [9][10]. - Notable brands like FILA and Nike continue to dominate the sports and outdoor categories, with FILA leading in sales during the festival [9][10]. - The report emphasizes the importance of domestic demand recovery as a key investment theme for 2025, highlighting potential growth in high-performance sports apparel and home textiles [10][39]. Market Dynamics - The cotton price index showed a slight increase in domestic prices, while international cotton prices experienced a decline [35][36]. - The report notes a significant shift in consumer behavior towards high-quality growth and simplified purchasing processes during major sales events [9][10]. - The overall textile and apparel market is expected to see structural investment opportunities rather than broad-based recovery, focusing on quality brands and innovative products [8][10].