Guoxin Securities·2025-09-16 15:02Investment Rating - The investment rating for the textile and apparel industry is "Outperform the Market" [2] Core Insights - The textile manufacturing sector shows growth while the apparel and home textile sectors face performance pressure. In the first half of 2025, textile manufacturing and apparel/home textile revenues grew by 7.8% and declined by 6.4% year-on-year, respectively. The gross margin for textile manufacturing remained stable at 19.4%, with a net margin increase of 2.2% to 8.5%. In contrast, the apparel/home textile sector saw a slight gross margin increase of 0.1% to 46.1%, but a net margin decline of 1.1% to 8.5% [3][12][15] Summary by Sections 1. Sector Summary: Textile Manufacturing Growth, Apparel/Home Textile Performance Pressure - In the first half of 2025, textile manufacturing revenue increased by 7.8% while apparel/home textile revenue decreased by 6.4%. The gross margin for textile manufacturing was 19.4%, and the net margin improved to 8.5%. The apparel/home textile sector's gross margin was 46.1%, with a net margin of 8.5% [3][12][15] 2. Sports Apparel: Industry Maintains Growth, Brand Differentiation - Sports brands continued to see revenue growth around 10%, while non-sports apparel brands mostly experienced revenue declines. The online channel outperformed offline, with some brands maintaining growth in direct sales [3][5] 3. Casual Home Textiles: Demand Under Pressure, Online Channels and New Business Models Leading Growth - The casual home textile sector continues to face demand pressure, but online channels and new business models are driving some growth [3][5] 4. Contract Manufacturing: Revenue Steady Amid Tariff Policy Impact, Profitability Stable - The textile manufacturing sector maintained steady revenue growth despite tariff policy disruptions. Major contract manufacturers like Huayi and Shenzhou reported full orders, with revenue growth exceeding 10% [3][5][20] 5. Textile Materials: Tariff Policy Affects Client Order Caution, Profitability Varies - The textile materials sector is experiencing varied profitability due to cautious ordering from clients influenced by tariff policies [3][5] 6. Q3 Report Outlook: Brand Trends Stabilizing, Manufacturing Order and Shipment Improvement - The apparel/home textile sector is expected to see improved revenue growth in Q3 compared to Q2, while the textile manufacturing sector anticipates better order and shipment performance following tariff policy stabilization [3][5] 7. Investment Recommendations - Focus on fundamentally sound, undervalued leaders in the market. For sports apparel, brands like Anta Sports, Xtep International, Li Ning, and 361 Degrees are recommended. In textile manufacturing, companies like Shenzhou International and Huayi Group are highlighted for their resilience and potential for profit improvement [5][6]