Investment Rating - The report maintains a positive outlook on the textile and apparel industry, indicating a "Buy" rating for the sector in 2025 [2][5]. Core Insights - The report highlights a clear recovery direction for brands, with a focus on order restoration in the manufacturing sector. The domestic demand is showing a steady recovery, while external demand is under short-term pressure due to export declines [4][5]. - The retail performance of brands has been improving since the third quarter, with monthly growth rates gradually increasing from a low of 1.8% in July to 6.3% in October. The fourth quarter is expected to continue this trend due to seasonal demand and consumption promotion policies [5][13]. Summary by Sections 1. Industry Overview - Domestic demand is on a steady recovery path, with retail sales in the textile and apparel sector growing by 3.5% year-on-year to 1205.3 billion yuan from January to October 2025. The overall retail sales for the same period increased by 4.3% to 41.2 trillion yuan [4][13]. - Export pressures are evident, with textile and apparel exports in October 2025 amounting to $22.26 billion, a year-on-year decline of 12.6% [4][16]. 2. Hong Kong Sports Sector - The sports sector experienced a slight weakening in sales in Q3 2025, with brands like Anta and FILA showing low single-digit growth. However, other brands saw growth rates between 45-50% [4][24]. - Li Ning's overall sales decreased in Q3, while its youth brand maintained double-digit growth. Xtep showed stable performance with low single-digit growth in its main brand [4][24]. 3. Textile Manufacturing - The manufacturing sector faced disruptions due to tariffs in Q3 2025, with companies like Huayi and Yueyuan reporting revenue declines of 0.3% and 6.1%, respectively. However, a gradual recovery is expected as tariff impacts stabilize [4][29]. - The upstream textile sector showed steady growth, with companies like Weixing and Xin'ao reporting revenue increases of 1% year-on-year [4][29]. 4. Men's and Women's Apparel - Men's apparel showed stable revenue growth, but increased marketing and channel expansion costs pressured profits. Women's apparel is showing signs of recovery, with brands like Ge Li Si experiencing significant profit improvements [4][22]. - The report notes that women's apparel companies generally saw single-digit revenue declines, but the rate of decline has narrowed compared to 2024 [4][22]. 5. Children's Apparel - Children's apparel brands reported steady revenue growth, but increased expenses led to weaker profit performance. Companies like Semir and Jiama reported revenue growth of 5% and 3%, respectively, but faced significant profit declines [4][22]. 6. Home Textiles - The home textile sector showed varied performance, with brands like Luolai and Shuixing exceeding expectations due to successful product launches. Luolai's revenue grew by 6% year-on-year, while Shuixing's grew by 11% [4][22]. 7. Investment Analysis - The report suggests that improving domestic demand is a key investment theme for 2025, with a focus on high-quality domestic brands and recovery opportunities in the textile manufacturing sector. Recommended stocks include sports brands like Bosideng, Anta, and Li Ning, as well as home textile companies like Luolai and Shuixing [4][5].

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].