Shenwan Hongyuan Securities·2026-03-08 13:48Investment Rating - The report maintains a "Buy" rating for Bosideng, projecting steady growth and high-quality development in the upcoming fiscal years [12][17]. Core Insights - The textile and apparel sector underperformed the market, with the SW textile and apparel index declining by 2.8% from March 2 to March 6, 2026, lagging behind the SW All A index by 0.5 percentage points [4][5]. - Adidas reported a record revenue of €24.811 billion for 2025, a 5% year-on-year increase, and a net profit of €1.34 billion, up 75.4% year-on-year, prompting an upward revision of its 2026 guidance [11][19]. - The report highlights potential investment opportunities in the sports industry chain, particularly following strong performance from leading brands like Adidas and On [11][19]. Industry Data Summary - Retail sales in China for 2025 reached ¥50.12 trillion, growing by 3.7% year-on-year, with the apparel and textile category contributing ¥1.5215 trillion, a 3.2% increase [4][26]. - In December 2025, textile and apparel exports amounted to $25.99 billion, reflecting a 7.4% year-on-year decline, with specific declines in textile yarns and clothing accessories [33][34]. - Cotton prices showed a slight decrease, with the national cotton price index at ¥16,567 per ton, down 0.17% [35]. - The Australian wool price index increased significantly, with a year-on-year rise of 61.7% in USD terms, indicating a strong demand for wool [38]. Company-Specific Insights - Bosideng is expected to achieve mid-single-digit revenue growth in FY26, with a focus on maintaining quality and health in its business operations despite a warmer winter affecting sales [12][14]. - The report notes that the performance of upstream textile raw materials is expected to improve, with companies like Weixing expected to recover in 2026 [10][11]. - On reported a revenue of CHF 3.014 billion for 2025, a 30% increase year-on-year, with a target of CHF 3.44 billion for 2026, indicating strong growth potential in the sports apparel segment [11][19].