Investment Rating - The report maintains a "Positive" investment rating for the textile and apparel industry [9] Core Insights - The textile and apparel industry is experiencing pressure from tariffs, leading to a decline in manufacturing performance and continued challenges for brand performance [4][17] - In H1 2025, the A-share textile and apparel sector reported revenues of 796.9 billion and net profits of 74.4 billion, reflecting a year-on-year decline of 0.3% and 6.7% respectively [4][5] - The report highlights that the retail environment remains weak, impacting revenue growth across various segments [4][19] Revenue and Profit Analysis - Revenue growth rates for H1 2025 compared to H1 2024 are as follows: Sports (+7.9%), Mass Market (+0.7%), Textile Manufacturing (+0.5%), Mid-High End (-1.4%), Home Textiles (-2.5%) [2][6] - In Q2 2025, revenue growth rates compared to Q2 2024 are: Mass Market (+3.5%), Home Textiles (+0.8%), Mid-High End (+0.6%), Textile Manufacturing (-0.04%) [2][6] - Profitability analysis shows that in H1 2025, net profit growth rates are: Textile Manufacturing (+4.5%), Sports (-7.1%), Mid-High End (-9.4%), Home Textiles (-15.6%), Mass Market (-16.0%) [2][7] - In Q2 2025, net profit growth rates are: Textile Manufacturing (-6.4%), Home Textiles (-17.3%), Mass Market (-26.7%), Mid-High End (-36.6%) [2][7] Segment Performance - The sports segment shows resilience with a revenue of 750.6 billion in H1 2025, despite a net profit decline of 7.1% [19][20] - The mid-high end segment faces significant challenges with a revenue of 129.4 billion and a net profit decline of 9.4% in H1 2025 [36][40] - The mass market segment reported a revenue of 428.1 billion in H1 2025, with a slight decline in net profit [4][5] - Home textiles continue to struggle, with a revenue of 74.4 billion and a net profit decline of 15.6% in H1 2025 [4][5] Operational Quality - The report indicates that operational quality is declining, with inventory and accounts receivable turnover rates decreasing in a weak retail environment [4][5] - The cash flow situation remains healthy, with operating cash flow for the sports segment at 122 billion, maintaining a ratio of cash flow to net profit at 1.1 [28][33]

Investment Rating - The report maintains an "Outperform" rating for the textile and apparel industry [5][8]. Core Views - The apparel retail sales growth in July showed a slight decline, with outdoor gear and maternal and infant products being highlighted as key areas for new stock analysis [1][2]. - The textile manufacturing sector is experiencing a rebound, with Vietnam's textile exports accelerating to a growth rate of 16.7% in July, while China's textile exports showed a modest improvement [2][4]. - The report emphasizes the importance of focusing on companies with strong performance in their mid-year reports, particularly those with solid fundamentals and undervalued positions [3][4]. Summary by Sections Market Review - Since August, the textile and apparel sector has performed in line with the broader market, with textile manufacturing outperforming branded apparel, showing increases of 4.2% and 3.4% respectively [1][13]. - Key companies leading the market include Xtep International (+9.4%), Bosideng (+8.5%), and Li Ning (+8.1%) [1][21]. Brand Apparel Insights - In July, apparel retail sales grew by 1.8% year-on-year, with a slight month-on-month decline [1][22]. - E-commerce sales saw a significant rebound, particularly in the sports and outdoor segments, with growth rates of 11% and 26% respectively [1][2]. Textile Manufacturing Insights - Vietnam's textile exports showed a month-on-month acceleration, while China's textile exports remained flat with a year-on-year decline of 0.6% [2][4]. - The report notes that the pricing of cotton has shown slight fluctuations, with a decrease of 0.7% in August [2][4]. New Stock Analysis - The report highlights three new stocks in the outdoor gear and maternal and infant products sectors, all of which are leaders in their respective markets and possess competitive advantages [3][4]. Company Performance Predictions - The report provides earnings forecasts and investment ratings for key companies, all rated as "Outperform," including Anta Sports, Xtep International, and Li Ning, with projected EPS growth for 2025 and 2026 [8][21].