--- title: "Guosen Securities Textile and Apparel Industry 2025 Investment Strategy: Preferred Direction of Competitive Landscape Optimization, Focus on High Elasticity Opportunities to Boost Consumption" type: "News" locale: "en" url: "https://longbridge.com/en/news/223551576.md" description: "Guosen Securities released its 2025 investment strategy, focusing on the textile and apparel industry, and recommending attention to three main lines: support from consumption policies, overseas capacity layout, and high dividend strategies. It is expected that the fundamentals of brand consumption will improve in 2024, with increasing differentiation among textile manufacturing companies, where undervalued high-performing enterprises possess safety margins and upward elasticity. In the first three quarters, textile manufacturing companies showed good performance growth, but apparel brands faced sales pressure. In October and November, textile exports grew significantly, and apparel retail showed some improvement" datetime: "2024-12-30T08:49:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/223551576.md) - [en](https://longbridge.com/en/news/223551576.md) - [zh-HK](https://longbridge.com/zh-HK/news/223551576.md) --- # Guosen Securities Textile and Apparel Industry 2025 Investment Strategy: Preferred Direction of Competitive Landscape Optimization, Focus on High Elasticity Opportunities to Boost Consumption According to the Zhitong Finance APP, Guosen Securities released a research report stating that this year, both the A-share and Hong Kong stock textile and apparel indices have underperformed the market. The manufacturing sector and Hong Kong sports brand stock prices are relatively stable. Currently, the sector's valuation and EPS have adjusted sufficiently, and the fundamentals of brand consumption are expected to marginally improve by 2025. The differentiation among textile manufacturing companies is expected to become more pronounced, with undervalued high-performing enterprises having both safety margins and upward elasticity. Focus on three main lines in textiles and apparel: consumer policy support, capturing segmented growth opportunities and high recovery potential; attention to manufacturing leaders with improved overseas capacity layout and long-term market share enhancement capabilities; high dividend strategy, focusing on stable profit high-dividend targets. ## **Guosen Securities' main viewpoints are as follows:** **2024 Review: Brand performance under pressure, manufacturing and sales booming, textile and apparel index underperforming the market.** **1) Performance review for the first three quarters:** In the first three quarters of this year, textile manufacturing companies benefited from downstream brand inventory replenishment, with both production and sales booming. The increase in capacity utilization drove profit growth to outpace revenue growth, with performance generally achieving double-digit growth. Clothing and home textile brand companies faced increasing sales pressure due to weak consumer demand and declining offline foot traffic, with net profits negatively impacted by operational leverage, declining more than revenue; among them, sports apparel performed relatively well. **2) Recent updates since the fourth quarter:** In October and November, textile exports from Vietnam and China grew rapidly, and clothing retail improved compared to the third quarter. In terms of brands, clothing retail in October and November increased by 1.1% year-on-year, a significant improvement compared to the third quarter; October saw an 8.0% increase, while November experienced a 4.5% year-on-year decline in clothing retail sales due to pre-consumption and the timing of the Double Eleven promotional event. In October and November, the three platforms of Tmall, JD.com, and Douyin maintained rapid growth in outdoor products, with women's clothing and home textiles achieving double-digit growth. In manufacturing, textile and footwear exports from Vietnam increased by 18.2% and 33.0% year-on-year, respectively; China's textile exports grew by 12.4% year-on-year, while clothing and footwear exports increased by 5.3% and decreased by 1.9%, respectively. The export growth rates for Vietnam and China have accelerated compared to the cumulative growth in the first three quarters. Most Taiwanese OEMs achieved positive year-on-year revenue growth in October and November, with companies like Yuanyuan, Zhiqiang, Donglongxing, and Guangyue achieving double-digit growth. **3) Market review:** This year, both the A-share and Hong Kong stock textile and apparel indices have underperformed the market, while manufacturing and Hong Kong sports brand stock prices are relatively stable. Currently, the sector's valuation and EPS have adjusted sufficiently, and the fundamentals of brand consumption are expected to marginally improve by 2025. The differentiation among textile manufacturing companies is expected to become more pronounced, with undervalued high-performing enterprises having both safety margins and upward elasticity. **Main Line One: Consumer policy support, capturing segmented growth opportunities and high recovery potential.** **1\. Steady growth in sports and outdoor products, with some segmented tracks experiencing high prosperity:** The popularity of running, tennis, badminton, mountaineering, and skiing remains high, accompanied by a boom in outdoor tourism, leading to rapid sales growth of corresponding products such as running shoes, tennis apparel, badminton apparel, jackets, sun protection clothing, and skiing apparel. From the industry's growth trend: **1) Running:** Although running sports and running shoes have already reached a large scale, their popularity continues to rise; in terms of competitive landscape, the wearing rate of domestic running shoes in marathon competitions has increased, with domestic brands gaining market recognition and market share **2) Segmenting popular tracks:** In the post-pandemic era, sports scenes are gradually expanding outdoors, with rapid growth in participation in tennis, badminton, outdoor mountaineering, trail running, skiing, and other ice and snow sports. Additionally, the tourism boom in places like Xinjiang and Harbin, along with fashion trends, has driven outdoor apparel sales. **II. "Quality-price ratio" consumption, with quality upgrades and material functionality as marketing selling points:** 1. The Cotton Era attracts consumers through 100% pure cotton material education, with cotton soft towels becoming a hot product; recent negative events in the sanitary napkin industry have led to rapid growth for the company's sanitary napkin brand "Nice Princess." 2. Down jackets, as functional products, show a trend of consumption upgrading, with an increase in the sales proportion of mid-to-high price segments in casual and sports down jackets. Bosideng stands out in the high price segment of casual down jackets, and in recent years, the product upgrades in the down jacket main business have helped increase prices, with rapid growth in revenue from innovative categories. **III. Home textiles are expected to benefit from national subsidies and a rebound in wedding celebrations:** According to the breakdown of home textile demand structure: 1) Daily replacements account for over 70%, and are expected to benefit from national subsidies driven by purchasing power, especially since top brand products are relatively high-priced, allowing consumers to enjoy greater discounts, providing better upward elasticity for top brands. 2) Wedding demand accounts for about 7%, and the home textile wedding series performed poorly this year, but is expected to rebound next year. **IV. Cost-effective casual apparel for the masses, with price-sensitive customer groups, high elasticity in consumption recovery, and positive operating leverage:** Adult and children's casual apparel and sports outdoor apparel are significantly affected by economic weakness and declining consumer demand. Leading mass casual brands perform better than the overall industry due to their cost-effectiveness. Given that the customer base is relatively price-sensitive, short-term national subsidy benefits and medium-to-long-term consumption recovery are expected to drive greater upward elasticity in the category. **Main Line Two: Focus on manufacturing leaders with improved overseas capacity layout and long-term share enhancement capabilities.** Current market concerns regarding textile manufacturing companies mainly focus on: 1. Tariffs imposed after Trump took office; 2. This year's high base and weak downstream consumption affecting upstream transmission, leading to concerns about future growth sustainability. 1. Regarding tariffs, based on a review of Trump's 1.0 period, during the most severe Sino-U.S. trade friction in 2019, there was a significant decline in China's clothing and sports shoe export value at the macro level. For companies, since most textile enterprises with direct export businesses had already shifted production capacity to Southeast Asia at that time, the impact was very limited; moreover, after the last round of friction, textile manufacturing companies further expanded their overseas capacity layout, further weakening the direct impact. 2. Regarding growth sustainability, with the end of the current inventory cycle downstream, future manufacturers' orders will be more closely related to their own customer sales growth, customer share enhancement potential, and new customer expansion capabilities. **Main Line Three: High dividend strategy, focusing on stable profit and high dividend targets.** In recent years, as economic growth slows, the performance growth expectations of listed companies have been adjusted downward, highlighting the attractiveness of targets with stable performance growth and high dividend yields. Since 2022, the high dividend sector in A-shares has shown continuous excess returns. Some sub-sectors in the textile and apparel industry have characteristics of high market concentration (such as the sports industry chain), optimized competitive patterns (men's wear industry), and stable top shares in the mid-to-high-end market (home textiles, women's wear industry). Leading companies often maintain a leading and stable performance growth rate, while also having good profitability and ROE levels Sufficient cash flow and a relatively high dividend level result in a strong certainty of dividend yield. **Risk Warning:** Consumer demand recovery is below expectations, overseas economic recession, international political and economic risks, intensified market competition ### Related Stocks - [002722.CN](https://longbridge.com/en/quote/002722.CN.md) - [003036.CN](https://longbridge.com/en/quote/003036.CN.md) - [688789.CN](https://longbridge.com/en/quote/688789.CN.md) - [300979.CN](https://longbridge.com/en/quote/300979.CN.md) - [02698.HK](https://longbridge.com/en/quote/02698.HK.md) - [09618.HK](https://longbridge.com/en/quote/09618.HK.md) - [300054.CN](https://longbridge.com/en/quote/300054.CN.md) - [002193.CN](https://longbridge.com/en/quote/002193.CN.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [002955.CN](https://longbridge.com/en/quote/002955.CN.md) - [01470.HK](https://longbridge.com/en/quote/01470.HK.md) - [002003.CN](https://longbridge.com/en/quote/002003.CN.md) - [603877.CN](https://longbridge.com/en/quote/603877.CN.md) - [603790.CN](https://longbridge.com/en/quote/603790.CN.md) - [003006.CN](https://longbridge.com/en/quote/003006.CN.md) - [600546.CN](https://longbridge.com/en/quote/600546.CN.md) - [300856.CN](https://longbridge.com/en/quote/300856.CN.md) - [301323.CN](https://longbridge.com/en/quote/301323.CN.md) - [00551.HK](https://longbridge.com/en/quote/00551.HK.md) - [300888.CN](https://longbridge.com/en/quote/300888.CN.md) - [601566.CN](https://longbridge.com/en/quote/601566.CN.md) - [300840.CN](https://longbridge.com/en/quote/300840.CN.md) - [002293.CN](https://longbridge.com/en/quote/002293.CN.md) - [301005.CN](https://longbridge.com/en/quote/301005.CN.md) - [02331.HK](https://longbridge.com/en/quote/02331.HK.md) - [002599.CN](https://longbridge.com/en/quote/002599.CN.md) - [688150.CN](https://longbridge.com/en/quote/688150.CN.md) - [002643.CN](https://longbridge.com/en/quote/002643.CN.md) - [09901.HK](https://longbridge.com/en/quote/09901.HK.md) - [600826.CN](https://longbridge.com/en/quote/600826.CN.md) - [300918.CN](https://longbridge.com/en/quote/300918.CN.md) - [600177.CN](https://longbridge.com/en/quote/600177.CN.md) - [002612.CN](https://longbridge.com/en/quote/002612.CN.md) - [600400.CN](https://longbridge.com/en/quote/600400.CN.md) - [DJTWW.US](https://longbridge.com/en/quote/DJTWW.US.md) - [PHUN.US](https://longbridge.com/en/quote/PHUN.US.md) - [603365.CN](https://longbridge.com/en/quote/603365.CN.md) - [DJT.US](https://longbridge.com/en/quote/DJT.US.md) - [600415.CN](https://longbridge.com/en/quote/600415.CN.md) - [002736.CN](https://longbridge.com/en/quote/002736.CN.md) - [002083.CN](https://longbridge.com/en/quote/002083.CN.md) - [003016.CN](https://longbridge.com/en/quote/003016.CN.md) - [002563.CN](https://longbridge.com/en/quote/002563.CN.md) - [09988.HK](https://longbridge.com/en/quote/09988.HK.md) - [DAO.US](https://longbridge.com/en/quote/DAO.US.md) - [03998.HK](https://longbridge.com/en/quote/03998.HK.md) - [GOOS.US](https://longbridge.com/en/quote/GOOS.US.md) - [600398.CN](https://longbridge.com/en/quote/600398.CN.md) - [301357.CN](https://longbridge.com/en/quote/301357.CN.md) - [688378.CN](https://longbridge.com/en/quote/688378.CN.md) - [02013.HK](https://longbridge.com/en/quote/02013.HK.md) - [601696.CN](https://longbridge.com/en/quote/601696.CN.md) - [00777.HK](https://longbridge.com/en/quote/00777.HK.md) ## Related News & Research - [2 dividend stocks that are no-brainer buys in August](https://longbridge.com/en/news/296183845.md) - [00:23 ETDuesenberg SSJ Special Speedster Named Best of Show at the 75th Pebble Beach Concours d'Elegance](https://longbridge.com/en/news/296055208.md) - [YieldMax BRK.B Option Income Strategy ETF declares $0.1399 dividend](https://longbridge.com/en/news/296383218.md) - [TABLE-Asian physical rubber prices - August 19](https://longbridge.com/en/news/296318042.md) - [YieldMax XOM Option Income Strategy ETF declares $0.0895 dividend](https://longbridge.com/en/news/296397963.md)