According to a research report from Shenwan Hongyuan, from January to December 2025, China's retail sales of clothing, footwear, and hats, and textiles reached 1.52 trillion yuan (a year-on-year increase of 3.2%). Specifically, in the fourth quarter of 2025, the growth rates were +6.3%, +3.5%, and +0.6% respectively, with higher-than-average winter temperatures contributing to a slowdown in winter apparel sales. On the external demand front, China's textile and apparel exports amounted to $293.8 billion (a year-on-year decrease of 2.6%). In contrast, Vietnam's textile exports reached $39.6 billion (a year-on-year increase of 7.0%), with its export growth rate surpassing that of China, reflecting a divergence in orders among production regions amid the ongoing shift in textile supply chains. Tariff policies creating differentials between regions are expected to further intensify this divergence and accelerate the transfer, benefiting companies with mature global expansion capabilities and flexible worldwide production allocation in the medium to long term. The main viewpoints of Shenwan Hongyuan are as follows: Terminal demand growth slowed in Q4 2025, while the gradual finalization of tariff negotiation outcomes is boosting export momentum. 1) Domestic Demand: From January to December, retail sales of clothing, footwear, hats, and textiles in China totaled 1.52 trillion yuan (a year-on-year increase of 3.2%). The growth rates for October, November, and December were +6.3%, +3.5%, and +0.6% respectively, with warmer winter temperatures leading to slower sales of winter clothing. 2) External Demand: China's textile and apparel exports from January to December reached $293.8 billion (a year-on-year decrease of 2.6%), comprising $142.6 billion in textiles (a year-on-year increase of 0.4%) and $151.2 billion in apparel and clothing accessories (a year-on-year decrease of 5.2%). Comparatively, Vietnam's textile exports during the same period were $39.6 billion (a year-on-year increase of 7.0%), and footwear exports were $24.2 billion (a year-on-year increase of 5.8%). Vietnam's higher export growth rate compared to China highlights the order divergence among production regions during the textile supply chain shift. Tariff differentials resulting from policies will further exacerbate this divergence and hasten the transfer, benefiting firms with established overseas capabilities and global production flexibility over the medium to long term.
Hong Kong-listed Sportswear: Against a backdrop of slowing overall industry growth, high-end outdoor and niche sports brands maintain high potential. Sluggish winter apparel sales in December dragged down overall Q4 2025 sales. FILA/outdoor brands are projected to achieve mid-single-digit/35%~40% year-on-year growth in sell-through, with the outdoor brand group continuing its strong growth trajectory. The value-for-money brand 361 Degrees saw offline sell-through grow approximately 10% year-on-year, while the core brand of Xtep achieved low-single-digit growth. Looking ahead to 2026, catalysts such as the Winter Olympics and an extended Spring Festival holiday are expected to support a steady recovery in sportswear brand demand. Men's, Women's, and Children's Apparel: Warmer winter temperatures may have disrupted sales, with reversal opportunities in the women's apparel segment warranting attention. 1) Women's Apparel: Xinya Holdings/Ellassay/DAZZLE are estimated to report high-single-digit growth/flat/flat year-on-year revenue growth for Q4 2025, with net profit attributable to shareholders turning from loss to profit/turning from loss to profit/high growth. As companies' previous deep adjustments and efficiency improvements progress, opportunities for a turnaround from difficulties are promising. 2) Men's Apparel: Heilan Home is expected to report revenue/net profit attributable to shareholders growth of +5%/+20% year-on-year for Q4 2025, driven by steady growth of its core brand and profitability per store in its city outlet format, with potential for accelerated expansion in 2026. 3) Children's Apparel: Semir is projected to report flat revenue and net profit attributable to shareholders year-on-year for Q4 2025. Jiama Holdings is estimated to see slight revenue growth, with the decline in net profit narrowing significantly compared to Q3 2025, amid expectations that pro-natalist policies will boost maternal and infant consumption. Home Textiles: Fuanna remains in a destocking cycle, while Luolai and Mercury demonstrate stable performance. Luolai Lifestyle is expected to report revenue/net profit attributable to shareholders growth of +8%/flat year-on-year for Q4 2025, with potential goodwill impairment at Lexington possibly impacting profits. Facing a high base from December, Mercury is estimated to achieve revenue and net profit attributable to shareholders growth of +8%/+10% year-on-year. Fuanna continues its inventory reduction phase, with both revenue and net profit projected to decline.
Nonwoven Fabric Industry Chain: Continues to benefit from quality upgrades and expanding demand, maintaining rapid earnings growth. Winner Medical/Yanjiang/Novel are projected to achieve revenue growth of +10%/+15%/+20% year-on-year for Q4 2025, with net profit attributable to shareholders showing high growth/turning profitable/+20% growth, continuing the upward trend. Winner Medical's high profit growth is partly attributable to a low base in Q4 2024. The global wet and dry wipes market is valued in the hundreds of billions globally and tens of billions in China, with Chinese growth outpacing the global average. The rise of new, specialized brands backed by superior supply chains remains a promising trend. Furthermore, the substitution potential for hot-air nonwovens overseas is vast, favoring companies deeply integrated with international hygiene brands for sustained order share growth. Textile Manufacturing: Performance adjustments at brands like Nike lead to volatility in the sportswear manufacturing chain; optimism remains for the Australian wool sector with clear supply contraction and emerging demand. 1) Midstream: Affected by performance fluctuations at brands like Nike and Converse, order intake in related manufacturing chains remains weak. Shenzhou International, Huafang Group, and Yue Yuen are expected to face performance pressure in Q4 2025. 2) Upstream: Definite contraction in Australian wool production, coupled with growing demand for sportswear wool apparel, is driving up Australian wool prices. XinAo, with its substantial low-cost raw material reserves, stands to benefit from these price increases. The recovery in orders is expected to gradually translate into earnings elasticity, with Q4 2025 revenue projected for double-digit growth and even greater elasticity on the profit side.
Industry Outlook and Investment Analysis: Looking ahead to 2026, domestic demand is expected to gradually recover, highlighting high-growth new consumption segments: ① High-Performance Outdoor: BOSIDENG (03998), ANTA Sports (02020), Topsports International (06110), 361 Degrees (01361); suggest monitoring Pure Outdoor (has filed IPO application), Li Ning (02331), Xtep International (01368). ② Discount Retail: Heilan Home (600398.SH) (via its JD.com Outlet business). ③ Personal Care & Cleaning: Novel (603238.SH), Winner Medical (300888.SZ), Jieya (300978.SZ). ④ Sleep Economy: Luolai Lifestyle (002293.SZ), Mercury Home Textile (603365.SH). The gradual resolution of global tariff variables does not alter the core global competitiveness of manufacturers: ① Sportswear Manufacturing Chain: SHENZHOU INTL (02313), Huafang Group (300979.SZ), Yue Yuen Industrial (00551), Weixing (002003.SZ), Bairun (601339.SH). ② Australian Wool Price Cycle: XinAo (603889.SH). ③ Hygiene Material Upgrade Chain: Yanjiang (300658.SZ). Risk Warning: Consumer recovery falls below expectations; intensifying industry competition; inventory impairment risks; rising raw material costs.
Comments