Investment Rating - The report maintains a "Buy" rating for the industry, highlighting potential growth opportunities in the textile and apparel sector [20][25]. Core Insights - The textile and apparel sector has shown resilience, with the SW textile and apparel index outperforming the SW All A index by 3.3 percentage points during the period from October 13 to October 17, 2025 [3]. - Domestic demand is gradually recovering, while external demand remains volatile, emphasizing the value of globalized production capacity [10][11]. - The report suggests that companies with mature overseas capabilities and the ability to allocate production globally will benefit from the ongoing shifts in the supply chain due to U.S. tariff policies [8][11]. Summary by Sections Industry Performance - The SW textile and apparel index decreased by 0.3%, while the SW apparel and home textiles index increased by 0.4%, outperforming the SW All A index by 4.0 percentage points [3]. - Retail sales in the clothing, shoes, and textiles category reached 940 billion yuan from January to August, reflecting a year-on-year growth of 2.9% [10]. Export Data - In September, China's textile and apparel exports amounted to $24.42 billion, a year-on-year decline of 1.0%. However, textile yarn, fabric, and products saw an increase of 6.4% [10][44]. - Vietnam's textile exports grew by 9.1% in the same period, indicating a shift in production orders and competitive advantages for overseas production [8][11]. Cotton and Wool Prices - As of October 17, the national cotton price B index was reported at 14,683 yuan per ton, down 0.6% from the previous week [46]. - The Australian wool index showed a significant year-on-year increase of 30.7%, indicating strong demand in the wool market [10]. Company Performance - 361 Degrees reported a 10% year-on-year increase in retail sales for its main brand and children's line, while e-commerce sales grew by approximately 20% [16]. - Xtep International's main brand saw a low single-digit growth in retail sales, with online sales outperforming offline [22]. - The report highlights the strong performance of companies like Bosideng, Anta, and Li Ning, suggesting they are well-positioned to capitalize on the upcoming winter season [9][14]. Investment Recommendations - The report recommends focusing on high-quality domestic brands that are beginning to reverse their challenges, particularly in the sports and outdoor segments [14]. - Specific companies highlighted for investment include Bosideng, Anta, and 361 Degrees, with a suggestion to monitor Xtep and other emerging brands [14].

Group 1 - The company achieved approximately 10% year-on-year growth in offline sales for its main brand and children's clothing in Q3 2025, with e-commerce sales growing around 20%, demonstrating strong operational resilience amid a weakening retail environment [1] - The inventory level remained healthy, with a channel sales ratio stabilizing at 4.5-5 times, and the terminal discount rate maintained at around 30%, indicating effective inventory and discount management [1] - The company has rapidly expanded its core channel innovation "super stores," opening 23 new locations in September alone, totaling 93 stores by the end of Q3, with a strong likelihood of reaching a target of at least 100 stores by year-end [2] Group 2 - The product matrix has been continuously refreshed, with new iterations launched across core categories, including advanced running shoes and basketball footwear, showcasing the company's innovation capabilities [2] - The One Way brand is re-entering the offline market with a focus on the mid-to-high-end outdoor segment, opening 6 new stores during the National Day holiday, which is expected to create a second growth curve for the company [3] - The company has been deepening its capabilities in product, brand, and channel over the past two decades, with a focus on high cost-performance and strong functionality, positioning itself for continued growth and market share increase [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The company has demonstrated strong resilience in the retail environment, achieving approximately 10% year-on-year growth in both its main brand and children's clothing lines in Q3 2025, with e-commerce sales growing around 20% [8] - The company maintains a healthy inventory level with a stable discount rate, achieving a channel inventory turnover ratio of 4.5-5 times and a terminal discount rate close to 30% [8] - The company is innovating its channels significantly, with rapid expansion of its "super brand stores," opening 23 new stores in September alone, and plans to open at least 100 stores by the end of the year [8] - The product matrix continues to refresh, showcasing technological advancements in core categories, including new iterations of running shoes and basketball shoes [8] - The One Way brand is re-entering the offline market, focusing on the mid-to-high-end outdoor market, with new store openings and a product line adjustment to align with current outdoor trends [8] - The company has been deepening its operational capabilities in product, brand, and channel over the past two decades, positioning itself for sustained growth above industry averages [8] Financial Data and Profit Forecast - Revenue projections for FY2023 to FY2027 are as follows: - FY2023: 84.23 billion RMB - FY2024: 100.7 billion RMB - FY2025E: 111.8 billion RMB - FY2026E: 121.4 billion RMB - FY2027E: 130.8 billion RMB - Net profit projections for the same period are: - FY2023: 9.6 billion RMB - FY2024: 11.5 billion RMB - FY2025E: 12.6 billion RMB - FY2026E: 13.9 billion RMB - FY2027E: 15.1 billion RMB - The company maintains a stable gross margin, projected to increase slightly from 41.1% in FY2023 to 41.9% in FY2027 [6][17]