China Galaxy Securities: Clothing consumption is steadily increasing, and the export structure is showing differentiation

According to the Zhitong Finance APP, China Galaxy Securities released a research report stating that from January to September 2025, the clothing retail sales reached 1,061.3 billion yuan, a year-on-year increase of 3.1%, which is weaker than the same period's social retail growth rate by 1.4 percentage points, but the gap has further narrowed compared to January to August. Looking ahead to Q4, as the prolonged high-temperature weather in East China comes to an end and the nationwide trend of autumn cooling is established, coupled with the preheating of the "Double Eleven" event, it is expected that clothing consumption in October is likely to achieve further stabilization and recovery. In terms of exports, from January to September, the cumulative year-on-year growth rates of textile yarn and clothing exports were 3.0% and -1.6%, respectively, showing a differentiated export structure, with the upstream textile yarn growth outperforming the downstream clothing category, indicating a stabilization trend. The main points of China Galaxy Securities are as follows: Significant marginal improvement in clothing consumption, outperforming social retail growth year-on-year From January to September 2025, clothing retail sales reached 1,061.3 billion yuan, a year-on-year increase of 3.1%, which is weaker than the same period's social retail growth rate by 1.4 percentage points, but the gap has further narrowed compared to January to August. In September alone, clothing retail sales were 123.1 billion yuan, a year-on-year increase of 4.7%, with a month-on-month growth rate increase of 1.6 percentage points, outperforming the social retail growth rate by 1.7 percentage points. This improvement is mainly due to many northern regions entering autumn earlier than last year, with a concentrated launch of new autumn clothing in the terminal market, effectively activating seasonal consumption demand, combined with the low base effect from the same period last year driving the retail growth this month. Looking ahead to Q4, as the prolonged high-temperature weather in East China comes to an end and the nationwide trend of autumn cooling is established, coupled with the preheating of the "Double Eleven" event, it is expected that clothing consumption in October is likely to achieve further stabilization and recovery. Clothing exports continue to decline, with ongoing tariff negotiations between China and the U.S. In terms of exports, the growth rate of textile yarn exports in September was 6.6%, with a month-on-month increase of 4.7 percentage points; clothing exports decreased by 7.9% year-on-year, with the decline narrowing by 1.8 percentage points month-on-month. From January to September, the cumulative year-on-year growth rates of textile yarn and clothing exports were 3.0% and -1.6%, respectively, showing a differentiated export structure, with the upstream textile yarn growth outperforming the downstream clothing category, indicating a stabilization trend. However, clothing exports continued the downward trend from August, with the cumulative year-on-year decline further expanding from January to September. By country, the export of textiles to the U.S. in RMB terms decreased by 16.67% year-on-year, with a cumulative year-on-year decline of 8.21% from January to September, continuing the previous downward trend. Vietnam's textile export growth rate in September was 9.12%, with a cumulative year-on-year growth rate of 8.61% from January to September. After the implementation of the U.S.-Vietnam tariff agreement, Vietnam's exports have somewhat recovered, with a significant month-on-month improvement in September. Previously, Trump proposed that if a trade agreement with China was not reached by November 1, 2025, the U.S. would impose an additional 100% tariff on goods imported from China. On the morning of October 25, the U.S. and China began consultations on trade issues in Kuala Lumpur, Malaysia, and will continue to monitor the progress of subsequent negotiations regarding U.S.-China trade frictions. Investment suggestion: Recently, it is recommended to pay attention to high-quality targets with improved or stable growth in Q3 report performance Brand clothing recommendations: Hailan Home (600398.SH), Bi Yin Le Fen (002832.SZ), Bosideng (03998) Outdoor scene penetration, domestic sports leaders have competitive advantages in enriching categories and refined management, it is recommended to pay attention to Anta Sports (02020), Xtep International (01368), Li Ning (02331), and 361 Degrees (00361). Home textile consumption scene recovery, consumer subsidies boost demand, focus on Luolai Life (002293.SZ), Mercury Home Textiles (603365.SH), and Fuanna (002327.SZ). The trade policies between China and the United States still have certain uncertainties, international capacity layout, binding quality brand customers, and leading textile enterprises with scale effects still have advantages, it is recommended to pay attention to Huali Group (301268.SZ), Weixing (002003.SZ), Kairun (300577.SZ), and Shenzhou International (02313). Risk Warning Risks of fluctuations in overseas market demand; risks of uncertain trade policies; risks of fluctuations in raw material prices