Shenwan Hongyuan Securities·2026-03-15 11:15Investment Rating - The report maintains a "Buy" rating for companies in the textile and apparel industry, particularly highlighting the potential for upstream companies due to rising raw material prices [10][20][22]. Core Insights - The textile and apparel sector has shown weaker performance compared to the market, with the SW textile and apparel index declining by 0.6% from March 9 to March 13, 2026, underperforming the SW All A index by 0.1 percentage points [3][4]. - Upstream raw material prices, including cotton and wool, are on the rise, which is expected to improve the operational performance of upstream companies [10][12]. - The report emphasizes the long-term growth potential of the sportswear sector, driven by national policies promoting sports and health [12][14]. Summary by Sections Industry Performance - The SW textile and apparel index decreased by 0.6%, while the SW clothing and home textiles index increased by 0.4% [3][4]. - In terms of retail sales, the total retail sales of consumer goods reached 50.1 trillion yuan in 2025, growing by 3.7% year-on-year [10]. Recent Industry Data - In February, China's textile and apparel exports amounted to $22.44 billion, a year-on-year increase of 73.4% [10][40]. - Cotton prices have risen, with the national cotton price B index reported at 16,753 yuan per ton, up 1.1% week-on-week [10][45]. - The Australian wool price index increased to 1,272 cents per kilogram, reflecting a year-on-year rise of 62.0% [10][48]. Company Highlights - Huayi Group reported a revenue of 24.98 billion yuan for 2025, a 4.1% increase, but a net profit decline of 16.5% due to production capacity adjustments [11][15]. - Jian Sheng Group's revenue for 2025 was 2.59 billion yuan, with a net profit increase of 24.6%, driven by strong performance in seamless business [20][21]. - The report suggests focusing on companies like Li Ning, Anta, and 361 Degrees in the sportswear sector, as well as discount retailers and personal care brands [12][14]. Market Trends - The report indicates a gradual recovery in domestic demand in 2026, with a focus on new consumption trends in the sports and outdoor sectors [12][14]. - The global tariff situation is stabilizing, which is not expected to affect the core manufacturing competitiveness of the industry [12][14].