Oriental Securities: Textile brands have maintained K-shaped differentiation for 26 years, key tips for allocating midstream manufacturing leaders

The Zhitong Finance App learned that Orient Securities released a research report saying that the overall fundamentals of the brand apparel sector in the second half of the year were still in the process of refining. The bank is relatively more optimistic about outdoor sports, high-end fashion brands, functional home textiles, and Volkswagen's ultimate cost-effective brands. Export manufacturing highlights investment opportunities for midstream manufacturing leaders. The long-term competitive position of related companies in the global industry segment has not changed. Coupled with the good chip structure of related companies, it is expected that there will be good relative returns in the second half of the year. Gold lacks overall investment opportunities in the short term, and focuses on companies with obvious brand differentiation, strong terminal retail capabilities, or future channels that still have room for expansion.

Orient Securities's main views are as follows:

Brand clothing: structural differentiation continues, and the overall fundamentals in the second half of the year are still in the process of refining

According to Social Security Zero data for the first half of the year, the growth rate of branded apparel in the second quarter was weaker than in the first quarter, but overall growth remained steady. The bank expects July to be affected by weather such as typhoons, rain and water, and the retail side will continue its weak recovery trend in the second quarter. The bank maintains its earlier opinion: the most difficult period on the retail side of branded apparel has passed. It is expected that the industry will maintain a pattern of weak recovery and K-type differentiation throughout the year 26. The overall fundamentals of the sector are still in the bottom of the second half of the year. The bank is relatively more optimistic about outdoor sports, high-end fashion brands, functional home textiles, and VW's ultimate cost-effective brands.

Export manufacturing sector: Key tips on investment opportunities for midstream manufacturing leaders

At this point, in addition to continuing to be optimistic about cotton spinning leaders and wool spinning leaders that benefit from the logic of upstream inflation, the bank believes it can focus on midstream manufacturing leaders whose valuations and holdings are at historically low levels. The bank believes that leading midstream textile manufacturing companies were affected by a combination of factors such as a slowdown in overseas demand, an increase in upstream prices, appreciation of the RMB, and a concentrated climb in its new factories. Operating pressure was quite high in the first half of '26, but the continuous adjustment of stock prices in the early period already basically reflected the relevant pressure. Beginning in the third quarter, along with the weakening of upstream pressure due to geographical conflicts, a gradual recovery in demand from downstream brand customers and a difficult period of their own new factories, etc., the expectations for a month-on-month improvement in the operation of related leading companies are quite clear. The bank expects some companies' orders to accelerate starting in the second quarter. The bank has always believed that the long-term competitive position of related companies in the global industry segment has not changed. Coupled with the good chip structure of related companies, it is expected that there will be good relative returns in the second half of the year.

Gold and jewellery sector: Focus on companies with obvious brand differentiation and strong retail operation capabilities

The rapid rise in gold prices in the past two years and the sharp turmoil this year are still impacting and reshaping the industry as a whole. The industry is growing slower than expected, yet a few excellent companies are actively promoting channel optimization, product structure adjustment, and retail capacity improvement. The bank believes that the short-term sector lacks overall investment opportunities, and focuses on selecting companies with obvious brand differentiation, strong terminal retail capabilities, or that still have room for expansion in future channels.

Risk Alerts

Repeated recovery in domestic apparel consumer demand, fluctuations in gold prices, exchange rate fluctuations, and the possible impact of repeated geopolitical turbulence on upstream prices