Investment Rating - The report maintains an "Outperform" rating for the outdoor apparel and footwear industry [1] Core Insights - The outdoor footwear and apparel market in China is a trillion-yuan industry, experiencing double-digit growth, outpacing the global outdoor market growth [6][27] - The growth is driven by increased penetration of outdoor sports participants and high-end brands like Arc'teryx breaking into mainstream fashion, leading to a rise in affordable alternatives [6][29] - The industry is seeing a continuous increase in concentration, with the top ten outdoor brands expected to hold approximately 29% market share by 2024 [6][15] - E-commerce channels are becoming increasingly dominant, with the top ten brands in this space accounting for 40% of sales [6][15] Industry Overview - The outdoor footwear and apparel market in China is projected to reach 416 billion yuan by 2024, with a compound annual growth rate (CAGR) of 23.3% for apparel and 17.0% for footwear [29] - The market is characterized by a shift from professional outdoor gear to more casual and fashionable outdoor apparel, appealing to a broader consumer base [6][15] - The fastest-growing product categories include soft and hard shell jackets, which account for 40% of sales, and are expected to maintain double-digit growth [6][37] Brand Competitiveness - High-end and professional brands have advantages in technology, materials, and craftsmanship, allowing them to command higher prices [6][10] - Domestic brands are gaining market share, particularly in e-commerce, where they offer competitive pricing and functionality [6][10] - The report highlights key brands such as Anta Sports, Tabo, Bosideng, and others as significant players in the market [10][11] Product Analysis - High-end brands focus on technical barriers and product matrices, while mass-market brands emphasize multifunctionality and cost-effectiveness [6][10] - The report notes that the three-in-one jacket category constitutes about 40% of sales, highlighting its versatility for daily and light outdoor use [6][10] - The sales of outdoor footwear, particularly trail running shoes, are expected to see significant growth, with a projected CAGR of 94.5% [51] Supply Chain Insights - The high-end market is dominated by international suppliers, while domestic manufacturers benefit from the industry's overall growth [6][10] - The report indicates a trend of "international technology monopoly and accelerated domestic substitution" in the supply chain [10][11]

Investment Rating - The report maintains a "Buy" rating for key companies in the textile and apparel sector, including Anta Sports, Xtep International, and Li Ning, among others [12]. Core Insights - The report highlights the rapid expansion of the high-performance outdoor apparel market in China, with a projected market size growth from 53.9 billion yuan in 2019 to 102.7 billion yuan in 2024, representing a CAGR of 13.8% [22][25]. - The company Pelliot, established in 2012, has shown significant revenue growth, achieving 1.77 billion yuan in 2024, a 94% increase year-on-year, with a net profit of 280 million yuan, reflecting an 86% increase [1][17]. - The competitive landscape of the high-performance outdoor apparel market is relatively fragmented, with the top 10 brands holding a combined market share of 27.2% in 2024, and Pelliot being the fastest-growing brand with a retail CAGR of 127.4% from 2022 to 2024 [2][29]. Summary by Sections Company Overview - Pelliot focuses on high-performance outdoor apparel and equipment, offering a wide range of products suitable for various outdoor activities and urban commuting [1][17]. - The brand's revenue from the Pelliot brand accounted for 98% of total revenue in 2024, with the Excelsior brand contributing 33 million yuan [1][17]. Industry Overview - The high-performance outdoor apparel market in mainland China is expected to grow from 539 billion yuan in 2019 to 1,027 billion yuan in 2024, with a forecasted CAGR of 16% from 2024 to 2029 [2][22]. - The apparel segment is the largest within the high-performance outdoor apparel market, projected to reach 712 billion yuan in 2024, accounting for 69% of the total market [25]. Operational Highlights - Pelliot employs a Direct-to-Consumer (DTC) sales model, focusing on enhancing product quality and brand image through targeted marketing strategies [3][4]. - The company has invested significantly in R&D, with expenditures increasing from 13.6 million yuan in 2022 to 31.5 million yuan in 2024, representing a commitment to product innovation [3][30]. Financial Data Analysis - Pelliot's revenue and profit have shown rapid growth, with a projected revenue of 1.77 billion yuan and a net profit of 280 million yuan in 2024, indicating strong financial performance [1][21]. - The report emphasizes the importance of maintaining a healthy inventory turnover ratio, with the overall inventory situation being stable across the sector [5]. Market Trends - The report notes a healthy growth trajectory for the outdoor apparel sector, driven by increasing consumer participation in outdoor activities and a rising demand for multifunctional high-performance apparel [27][28]. - The report recommends focusing on brands with strong fundamentals and growth potential, particularly in the sportswear segment, which is expected to outperform the broader apparel market [5].

Core Viewpoint - Outdoor sports have become a fashionable symbol, gaining immense popularity among young people, leading to a surge in demand for outdoor gear and apparel [1][2]. Group 1: Market Trends - The outdoor sports segment includes various activities such as paddleboarding, frisbee, camping, hiking, fishing, rock climbing, and trail running, with a significant increase in social media posts related to outdoor experiences [2]. - Post-pandemic travel demand has driven outdoor sports consumption, with a notable surge in outdoor gear purchases ahead of the May Day holiday [4]. - According to Vipshop's report, outdoor fitness apparel sales surged by 51% week-on-week as of April 23 [5]. Group 2: Consumer Behavior - Douyin e-commerce data shows that sales of sun protection clothing and sports backpacks increased by 428% and 108% year-on-year, respectively [6]. - Young people are increasingly participating in hiking, redefining it as a social and recreational activity rather than just a physical challenge [7][10]. - The popularity of hiking is supported by social media platforms like Xiaohongshu, which reported nearly 7 million posts on outdoor activities, with hiking having a conversion rate of 47% [8]. Group 3: Industry Growth - The outdoor sports industry in China is projected to exceed 3 trillion yuan by 2025, with over 400 million participants as of the end of 2021 [10]. - The hiking segment, along with camping and cycling, is among the top three popular outdoor activities, significantly boosting sales of related equipment [11]. - Major brands like Anta and Li Ning are investing in the outdoor gear market, while new entrants are also emerging to capitalize on industry growth [12][18]. Group 4: Competitive Landscape - The global outdoor market is rapidly developing, with significant potential in the Chinese market [15]. - The competitive landscape for high-performance outdoor apparel is fragmented, with the top ten brands holding only 27.2% market share, indicating room for growth among domestic brands [20]. - Hiking gear, particularly jackets and pants, accounts for nearly 30% of the high-performance outdoor apparel market [23]. Group 5: Future Outlook - The market for high-performance outdoor apparel in mainland China reached 102.7 billion yuan in 2024, with an expected growth rate of 16% over the next five years [22]. - The demand for outdoor gear is expected to continue evolving, driven by a shift from niche to mainstream consumer preferences [25][28].