1. Report Industry Investment Rating - The overall investment rating for the cotton industry is neutral - with a slight bullish bias [3] 2. Report's Core View - The cotton market is influenced by multiple factors including macro - economic conditions, supply, demand, and inventory. Although there are some bearish factors such as the macro - economic recession expectation and import competition, the overall demand and inventory situation still support the cotton price in the medium - term. The release of subsidy policies in late March and early April will significantly impact the market's speculation on future supply - demand patterns [3] 3. Summary by Relevant Catalogs 3.1 Macro - economic Factors 3.1.1 International Macro - economy - The Federal Reserve keeps the federal funds rate target range at 3.50% - 3.75%. The market shifts from trading rate - cuts to trading economic recession due to the impact from the crude oil market. China and the US have economic and trade consultations in Paris, forming some new consensuses and agreeing to maintain further consultations [3] 3.1.2 Domestic Macro - economy - There is no specific macro - economic information provided other than the expectation of the new cotton subsidy policy [3] 3.2 Supply Factors 3.2.1 International Supply - Brazil's cotton production in the 2025/26 season is estimated to be 3.7951 million tons, a 6.9% year - on - year decrease. Pakistan's cotton yarn export volume in February 2026 is about 30,900 tons, a 1.5% month - on - month increase and a 57% year - on - year increase. The cumulative export volume from January to February is 61,300 tons [3] 3.2.2 Domestic Supply - The market is concerned about the new cotton target price subsidy policy. It is speculated that the production target of 36 million mu may be achieved in 2 - 3 years, and the direct subsidy price may be slightly reduced from 18,600 yuan/ton to 18,300 yuan/ton. The estimated domestic cotton production in the 26/27 season is about 7.24 - 7.25 million tons, with an estimated year - on - year decrease of about 8%. The 300,000 - ton sliding - duty quota for processing trade issued by the National Development and Reform Commission may relieve the supply - demand situation in the short - term but is unlikely to change the long - term supply - demand expectation. As of March 21, the national commercial cotton inventory is 5.0399 million tons, showing a seasonal decline [3][25][28] 3.3 Inventory Factors - The domestic commercial cotton inventory shows a seasonal decline, but the decline in Xinjiang slows down, resulting in a relatively stable year - on - year change. The terminal clothing inventory of state - owned enterprises is at a low level, and the inventory of finished products is being transferred from the yarn to the cloth segment, which supports the demand. The current inventory of grey fabrics is not high and may continue to support the market [3] 3.4 Demand Factors 3.4.1 International Demand - In January 2026, the US's total imports of textiles and clothing from China are about $1.078 billion, a 4.7% month - on - month increase and a 55.9% year - on - year decrease. The total imports of cotton textiles and clothing from China are about $288 million, a 13% month - on - month increase and a 56.6% year - on - year decrease. Pakistan's textile and clothing export volume in February 2026 is $1.311 billion, a 24.6% month - on - month decrease and a 7.2% year - on - year decrease. The cumulative export volume from January to February is $3.05 billion [3] 3.4.2 Domestic Demand - The downstream enterprises' operating rates are higher than the same period last year. The spinning profit is further repaired. However, the import of cotton yarn with high cost - performance squeezes the domestic cotton market. The overseas restocking has not started yet. The domestic retail sales of clothing, shoes, hats, and textiles in January - February 2026 show a year - on - year growth of 4.5%. The textile and clothing export volume in January - February is $50.45 billion, a 17.6% year - on - year increase [3][44][47] 3.5 Price and Market Trends 3.5.1 US Cotton - Due to the international situation and the improvement of the domestic - foreign cotton price difference, as well as the good fundamentals in the short - term, the US cotton is expected to maintain a strong trend. If the macro - economic trading expectation improves, it may reach 70 cents per pound [3] 3.5.2 Zhengzhou Cotton - This week, the center of Zhengzhou cotton has declined, but it shows strong support at key positions. The market is still in a slightly bullish trend. The good start of the downstream industry and the transfer of finished product inventory support the cotton price. However, the upward breakthrough still depends on the supply - side policies. After the continuous rise of the futures price, the risk has increased [3] 3.6 USDA Global Supply - Demand Balance Sheet - The overall situation in the March USDA global supply - demand balance sheet is slightly bearish. Globally, the production is increased by 246,000 tons to 2.634 million tons, the consumption is decreased by 139,000 tons to 1.7216 million tons, and the global inventory - to - consumption ratio is increased by 1.15% to 64.4%. In China, the production in 2025/26 is increased by 109,000 tons to 772,800 tons, the consumption is increased by 109,000 tons to 859,900 tons, and the monthly inventory - to - consumption ratio is decreased by 1.18% to 92.05% [4]

Investment Rating - The report maintains a "Buy" rating for several companies in the textile and apparel sector, including Li Ning, Anta Sports, Shenzhou International, and others, with specific price-to-earnings (PE) ratios projected for 2026 [10][31][33]. Core Insights - The textile and apparel industry is experiencing a rebound in exports, with China's apparel and accessories export value reaching $24.87 billion in January-February 2026, a year-on-year increase of 14.8% [2][25]. - The report anticipates a gradual improvement in orders for apparel manufacturing companies in 2026, with expectations of a recovery in profit quality [1][15]. - The report highlights the resilience of the sportswear segment, projecting steady growth in Q1 2026 due to effective marketing strategies and product launches [3][31]. Summary by Sections Weekly Topic - In February 2026, major apparel manufacturers reported revenue declines, with Feng Tai Enterprises, Ruo Hong, and Yu Yuan Group experiencing year-on-year decreases of 12.3%, 7.4%, and 5.9% respectively [1][15]. - The overall performance of apparel manufacturing is expected to remain flat in Q4 2025, with short-term profit margins under pressure due to order fluctuations and capacity ramp-up [1][15]. Weekly Insights - The sportswear segment is expected to maintain strong operational resilience, with companies like Li Ning and Anta Sports projected to see profit growth in 2026 [3][31]. - The report recommends focusing on quality stocks in the brand apparel sector, such as Bi Yin Le Fen and Hai Lan Zhi Jia, which are expected to show robust growth [32]. Industry Trends - The textile and apparel sector is witnessing a healthy inventory situation, with some brands showing strong sales performance, indicating potential for improved downstream orders [26][30]. - The report emphasizes the importance of monitoring international trade relations and consumer behavior, which could impact order trends for manufacturers [33]. Key Companies - Recommended companies include: - Li Ning: Expected net profit growth of 5.8% in 2026, with a PE ratio of 15 [31]. - Anta Sports: Projected net profit growth of 6.4% in 2026, with a PE ratio of 14 [31]. - Shenzhou International: Valued at a PE of 10 for 2026 [33]. - Wei Xing Co.: Recommended for its strong order trends, with a PE of 17 [33].

Investment Rating - The report assigns an "Accumulate" rating for the textile and apparel industry [4]. Core Insights - Cotton prices have entered a critical window, with a recommendation to continue supporting Bailong Oriental and Rainbow International Group. The reduction trend in cotton production from Brazil and the U.S. has been confirmed, indicating a clear upward channel for U.S. cotton prices [2][3]. - In January-February 2026, China's textile and apparel exports grew by 17.6% year-on-year, driven by a later Spring Festival and a low base from the previous year [2][18]. Summary by Sections Market Review - The textile and apparel sector in the A-share market fell by 0.57%, underperforming the CSI 300 by 0.75 percentage points, ranking 15th among 31 sectors. The textile manufacturing sector decreased by 0.45%, while the apparel and home textile sector increased by 0.36% [7]. - The current PE valuation for the textile and apparel sector is 20.64 times, below the historical average of 24.48 times [10]. Industry Data Tracking - In January-February 2026, China's textile and apparel exports totaled approximately $50.446 billion, a year-on-year increase of 17.63%. Textile exports were $25.574 billion (up 20.50%), and apparel exports were $24.871 billion (up 14.80%) [18]. - The retail sales of clothing in China increased by 1.2% year-on-year in December 2025, with a notable increase in the retail sales of clothing, shoes, and textiles [16]. Raw Material Price Tracking - Cotton prices have shown an upward trend, with the 3128B cotton price reported at 16,877 yuan/ton, up 1.2% week-on-week. The ICE No. 2 cotton price closed at 65.80 cents/pound, up 2.5% [5][20]. - Polyester prices also increased, with POY index rising by 20.92% to 9,250 yuan/ton [20]. Key Announcements and News - Bailong Oriental and Rainbow International Group are highlighted as key investment recommendations due to their strong performance and market positioning [2][3]. - Recent financial reports from companies in the sector indicate varied performance, with some companies showing revenue growth while others reported losses [32].

Core Insights - Morocco has become the largest fertilizer supplier to the EU by 2025, significantly enhancing its strategic position in the European market [1] - The EU's restructuring of supply chains post-Russia-Ukraine conflict has benefited Morocco, making it an important diversified supplier for Europe [1] Fertilizer Market - By 2025, Morocco's market share in EU fertilizer imports is projected to reach 19%, surpassing Russia's 12.8% [1] - Morocco's advantages include phosphate resources, geographical location, a free trade agreement with the EU, and a stable logistics system [1] Agricultural Exports - In 2024, Morocco is expected to become the largest vegetable supplier to the EU, with vegetable exports exceeding 1 million tons and generating approximately $2 billion in revenue, a 7% increase year-on-year [1] Export Structure - The total import value from Morocco to the EU is projected to reach $29.8 billion in 2024, with the export structure showing diversification [1] - Key sectors include automobiles (28%), machinery (24.6%), agricultural products (11.8%), and textiles (11.6%), indicating a shift from traditional agricultural exports to more industrial and high-value products [1]

Group 1 - The U.S. has officially imposed a 10% tariff on global goods, with potential increases to 15% or more for certain countries, while maintaining current tariff levels on China as per agreements [1][3][4] - The Trump administration is utilizing various legal frameworks to implement tariffs, including the International Emergency Economic Powers Act and the Trade Expansion Act, despite facing judicial challenges [3][4] - The European Union is particularly affected, with approximately 7% of its export goods facing tariffs exceeding 15%, impacting products worth around €4.2 billion [4] Group 2 - The upcoming visit of President Trump to China is influencing the administration's tariff strategy, focusing on pressuring allies rather than escalating tensions with China [5] - The U.S. is signaling a hardline stance towards allies like the EU, Japan, and South Korea, while maintaining a cautious approach towards China, indicating a strategic intent to leverage tariffs for negotiations [5][6] - China's response indicates a willingness to engage in dialogue while closely monitoring U.S. actions, suggesting potential retaliatory measures if the trade conflict escalates [6]

Core Insights - The UNCTAD report highlights that changes in trade policies are reshaping the global export competition landscape, particularly due to recent tariff changes in the US, which have made market access stricter and uneven [1][2] Trade Policy Changes - Tariff adjustments, regional trade agreements, and preferential programs are altering demand conditions and relative prices in domestic and international markets, significantly impacting the competitive position of countries and companies [1][2] - The report notes that the average applicable tariff in the US has increased by nearly 15 percentage points, leading to a significant expansion of tariff differences among suppliers [2][3] Impact on Export Competitiveness - Increased tariffs directly raise the cost of imported goods, leading to higher domestic prices and reduced competitiveness; for instance, US tariffs on South African wine have increased its price by approximately 17 percentage points compared to other wine-exporting countries [1][2] - Preferential programs, such as the African Growth and Opportunity Act (AGOA), provide special tariff treatment for eligible sub-Saharan African countries, enhancing their competitiveness in the US market for certain products like textiles and apparel [2][3] Geopolitical Factors - The report indicates that the escalation of global trade tensions and the rise of protectionism underscore the growing importance of geopolitical factors in future trade patterns, suggesting that trade measures may increasingly serve political objectives rather than purely economic ones [3] Opportunities in Export Trade - Changes in the trade environment are creating new export opportunities, with differentiated tariff structures leading to niche market opportunities; some developing countries may become alternative export hubs due to tariff advantages [4][5] - The restructuring of global value chains is driving regional optimization, with increased nearshoring and friend-shoring, particularly in intermediate goods trade between China and regions like ASEAN and Latin America [4][5]

Core Insights - The UNCTAD report highlights that changes in trade policies are reshaping the global export competition landscape, particularly due to recent tariff changes in the US, which have made market access stricter and uneven [1][2] Trade Policy Changes - Tariff adjustments, regional trade agreements, and preferential programs are altering demand conditions and relative prices in domestic and international markets, significantly impacting the competitive position of countries and companies [1] - The report notes that the average applicable tariff in the US has increased by nearly 15 percentage points, with significant disparities in tariffs among different suppliers [2] Impact on Export Competitiveness - Increased tariffs directly raise the cost of imported goods, leading to higher domestic prices and reduced competitiveness. For instance, US tariffs on South African wine have increased its price by approximately 17 percentage points compared to other wine-exporting countries, diminishing its competitiveness [1] - Conversely, reduced tariffs on Italian rice have made it more competitive in the US market [1] Regional Trade Agreements and Preferential Programs - Regional trade agreements typically include tariff reduction clauses, facilitating freer trade among member countries and lowering transaction costs. They also often standardize technical regulations and certification processes, further enhancing member countries' competitiveness [2] - Preferential programs provide specific countries or regions with special tariff treatments below the most-favored-nation rate, enhancing their competitiveness. For example, the African Growth and Opportunity Act (AGOA) offers eligible sub-Saharan African countries preferential access to the US market, significantly boosting their competitiveness in certain goods like textiles and apparel [2] Geopolitical Factors - The report indicates that the recent escalation of global trade tensions and the rise of protectionism underscore the increasing importance of geopolitical factors in future trade dynamics. Trade policies may increasingly be influenced by political objectives rather than purely economic considerations [3] Opportunities from Trade Environment Changes - Changes in the trade policy environment create new export opportunities, with differentiated tariff structures leading to niche market opportunities. Some developing countries may become alternative export hubs due to tariff advantages [4] - The restructuring of global value chains is driving regional optimization, with a notable increase in nearshoring and friendshoring. Trade policy uncertainties may prompt importers to seek lower-tariff alternative suppliers when tariffs are imposed on certain products [4] - The differentiated treatment of tariffs may provide opportunities for high-end manufacturing products to enter the US market, especially for countries offering cost-competitive products. This shift may also lead to growth in service trade, such as technical support and after-sales services [4]

Core Insights - The UNCTAD report highlights that changes in trade policies are reshaping the global export competition landscape, particularly due to recent tariff changes in the US, which have made market access stricter and uneven [2][3] Trade Policy Changes - Tariff adjustments, regional trade agreements, and preferential programs are altering demand conditions and relative prices in domestic and international markets, significantly impacting the competitive position of countries and companies [2][3] - The report notes that the average tariff in the US has increased by nearly 15 percentage points, leading to a significant expansion of tariff differences among suppliers [3][4] Impact on Export Competitiveness - Increased tariffs directly raise the cost of imported goods, leading to higher domestic prices and reduced competitiveness. For instance, US tariffs on South African wine have risen significantly, making it approximately 17 percentage points more expensive compared to wines from other exporting countries [2][3] - Conversely, reduced tariffs on Italian rice have enhanced its competitiveness in the US market [2][3] Regional Trade Agreements and Preferential Programs - Regional trade agreements typically include tariff reduction clauses, which facilitate freer trade among member countries and lower transaction costs. They also often standardize technical regulations and certification processes, reducing non-tariff barriers [3][4] - The African Growth and Opportunity Act (AGOA) provides eligible sub-Saharan African countries with preferential treatment for exports to the US, significantly enhancing the competitiveness of certain products like textiles and apparel [3][4] Geopolitical Factors - The report indicates that rising global trade tensions and protectionism highlight the increasing importance of geopolitical factors in future trade regulations, suggesting that trade policies may increasingly serve political objectives and national security [4][5] Opportunities from Trade Environment Changes - Changes in trade policy are creating new export opportunities, with differentiated tariff structures leading to niche market opportunities. Some developing countries are becoming alternative export hubs due to tariff advantages [6] - The restructuring of global value chains is promoting regional trade, with significant growth in intermediate goods trade between China and regions like ASEAN and Latin America [6] - The differentiation in tariffs may provide high-end manufacturing products from certain countries with opportunities to enter the US market, especially if they can offer more cost-competitive products [6]

Core Insights - In January 2026, Cambodia's exports of garments, footwear, and travel goods reached $1.47 billion, marking an over 8% increase compared to $1.36 billion in the same month last year [1] Group 1: Export Performance - Garment exports amounted to $1.01 billion, reflecting a year-on-year growth of 6.8% [1] - Textile exports reached $70 million, showing a significant year-on-year increase of 35.6% [1] - Footwear exports were approximately $200 million, with a year-on-year growth of 16.9% [1] - Travel goods exports totaled $190 million, experiencing a modest year-on-year increase of 1.1% [1] Group 2: Economic Impact - The garment, footwear, and travel goods sectors are crucial drivers of economic growth in Cambodia [1] - Major export markets for these products include the United States, Europe, the United Kingdom, Canada, South Korea, and Japan [1]

Core Viewpoint - The EU Carbon Border Adjustment Mechanism (CBAM) exemption policy is crucial for alleviating compliance pressure on businesses, particularly benefiting small and medium-sized exporting enterprises. Clarifying the exemption scope and specifying the types of products eligible for exemption can help companies accurately avoid compliance risks and reduce declaration costs [1]. Group 1: Exemption Principles - The exemption policy follows three main principles: "de minimis exemption, specific circumstances exemption, and equivalent mechanism exemption," which are only applicable to qualifying products and enterprises that have completed the necessary registration or documentation in advance [1]. - The primary intention of the exemption policy is to reduce the compliance burden on small and medium enterprises and special trade scenarios while ensuring carbon control goals are met, alongside humanitarian and industrial supply considerations [1]. Group 2: Categories of Exempt Products - The products eligible for exemption are categorized into four main types, each with clear applicable boundaries, requiring companies to accurately match their situations to avoid misjudging exemption qualifications [3]. - The first category includes de minimis imports, where products with an annual import volume of CBAM-controlled categories not exceeding 50 tons are exempt from declaration obligations. Notably, hydrogen and electricity do not qualify for this exemption, regardless of import quantity [3]. - The second category consists of non-controlled industry products, where only six high-carbon industries (steel, aluminum, cement, fertilizers, electricity, and hydrogen) are currently covered by CBAM. Products from other industries, such as textiles and electronics, are exempt from declaration obligations [3]. Group 3: Special Use and Equivalent Mechanism Products - The third category includes special use products, such as military or humanitarian goods and critical materials in short supply within the EU, which can apply for exemption through special agreements or relevant documentation [5]. - The fourth category pertains to products under equivalent carbon pricing mechanisms, where if the country of origin has established a carbon pricing mechanism equivalent to the EU's, and the enterprise can provide official carbon payment proof, they may apply for exemption. Additionally, products processed and re-exported under customs processing trade can apply for deferred declaration and taxation [5]. Group 4: Compliance Requirements - The application of the CBAM exemption policy hinges on "condition matching + documentation compliance." Enterprises must accurately assess their export product categories, import volumes, and trade scenarios against exemption conditions while retaining relevant documentation to avoid losing exemption rights due to missing materials or non-compliance with conditions [5].