Investment Rating - The report maintains a "Positive" investment rating for the textile and apparel industry, highlighting the resilience of the sports segment amidst fluctuating demand [2]. Core Insights - Domestic demand is recovering amidst fluctuations, while external demand is weakening. Retail sales in the textile and apparel sector showed a year-on-year growth of 2.9% to 940 billion yuan from January to August 2025, with a recovery trend noted in August [3][12]. - The sportswear segment demonstrates strong demand resilience, with leading brands like Anta and Li Ning outperforming expectations in the first half of 2025 [3][24]. - The textile manufacturing sector is facing challenges due to geopolitical tensions and rising costs, but certain segments, such as non-woven fabric, remain robust [4][5]. Summary by Sections 1. Industry Overview - Domestic retail sales in the textile sector grew by 4.6% year-on-year to 32.4 trillion yuan in the first eight months of 2025, with apparel sales increasing by 2.9% [3][12]. - External demand weakened, with textile exports declining by 5.0% year-on-year to 26.54 billion USD in August 2025, driven by reduced "export grabbing" and order shifts [3][16]. 2. Hong Kong Sports Segment - The sports segment in Hong Kong showed strong performance in H1 2025, with Anta's revenue increasing by 14% to 38.54 billion yuan and Li Ning's revenue growing by 3% to 14.82 billion yuan [3][24]. - The segment's resilience is attributed to effective inventory and discount management strategies [24]. 3. Textile Manufacturing - The midstream manufacturing sector reported stable order intake, with leading companies like Shenzhou International achieving a revenue growth of 15% in H1 2025 [3][4]. - The upstream textile sector faced challenges due to cautious ordering and weak expectations, with companies like Weixing and Xin'ao reporting revenue declines [3][5]. 4. Men's and Women's Apparel - Men's apparel showed stable revenue performance, but profit margins were pressured due to increased marketing and expansion costs [3][21]. - Women's apparel revenue stabilized, with notable performance from brands like Ge Li Si, which saw a 4% increase in comparable revenue [3][21]. 5. Children's Apparel - The children's apparel segment faced pressure on profits due to increased investment, despite stable revenue growth of 3% for brands like Semir and Jiama [3][21]. 6. Home Textiles - The home textiles sector experienced overall performance pressure due to the domestic consumption environment, with companies like Luolai and Mercury reporting mixed results [3][21]. 7. Investment Analysis - The report suggests that consumer promotion policies are expected to boost brand demand, with a focus on selecting resilient segments within the textile industry [3][4]. Recommended stocks include Anta, Li Ning, and Shenzhou International among others [3][4].