GF Securities: The performance of textile manufacturing accelerated in the first three quarters compared to the first half of the year, and the garment and home textile sector slowed
The Zhitong Finance App learned that Guangfa Securities released a research report saying that the textile manufacturing sector recommended focusing on (1) leading manufacturing companies in the sector, which are optimistic that their performance in the second half of the year is expected to improve month-on-month. The base figure affected by the implementation of assessed tariffs declined further during the same period last year, and external demand picked up, geopolitical risks in the Middle East weakened, and fluctuations in raw material prices gradually turned downward. (2) Leading companies in the price increase chain in the sector benefit from the scarce supply of wool in Australia and the improvement in the domestic and foreign cotton supply and demand pattern, benefiting leading companies in the cotton spinning and wool spinning industry. (3) Traditional enterprises rely on the same technological advantages, and cross-border high-end materials embrace new quality productivity.
The main views of GF Securities are as follows:
The performance of the textile manufacturing sector accelerated in the first three quarters compared to the first half of the year, and the clothing and home textile sector slowed down
2024/2025/2026H1/2026Q1-3, the revenue of the textile and garment industry was +1.4%/+7.2%/+6.5%, respectively. Among them, the textile manufacturing sector was +9.3%/+0.1%/+9.1%/+9.7%, and the clothing and home textile sector was -3.2%/+1.5%/+6.0%/+4.3%, respectively. 2024/2025/2026H1/2026Q1-3 The net profit of the textile and garment industry withholding non-return income was -18.6%/-3.9%/+22.4%/+20.9%, respectively. Among them, the textile manufacturing sector was +19.3%/+18.2%/+24.4%, respectively, and the clothing and home textile sector was -34.0%/-8.5%/+25.3%/+18.1%, respectively.
Channel, same store and online revenue situation in the clothing and home textile sector
Among clothing and home textile companies that have disclosed relevant data, the number of channels for 2026Q3 decreased net from the beginning of the year, and most of the same stores increased year-on-year. With 2026Q1-3, e-commerce revenue for most companies increased year-on-year, and the share of online revenue increased compared to the same period last year.
2026Q4 outlook
The textile manufacturing sector is expected to maintain a relatively rapid growth in performance. Midstream manufacturing-related companies in the sector remained low in the fourth quarter, and their performance is expected to continue to improve as overseas brand customers' demand for fall and winter replenishment downstream demand climbs. As the production capacity of new plants climbs, performance is expected to continue to improve. Companies related to upstream raw materials in the sector are expected to benefit from further increases in cotton and wool prices, supported by the expected marginal improvement in the cotton supply and demand pattern and the expected tightness of the wool supply and demand pattern. The performance of the apparel and home textile sector is expected to be uncertain, but there is still hope that it will remain steady. Although there has been no significant recovery in domestic terminal passenger flow and spending intentions, the weather has been abnormal since October. Most regions have had a high probability of a warm winter this year, and e-commerce accounts for the fourth quarter. The final performance of Double Eleven will affect the quarter's operating results. However, the fourth quarter of last year's base was not high, sector operating indicators were healthy, and inventory pressure was not high. The 2027 Spring Festival was 11 days earlier than this year, and franchisees' preparations moved forward, which is beneficial.
A-share recommendations to pay attention
Weixing Co., Ltd., Huali Group, Kairun Co., Ltd., Jiansheng Group, Xinao Co., Ltd., Blum Oriental, Fuchun Dyeing and Weaving, Taihua New Materials, Nanshan Zhishang, Henghui Security, Societe Generale Technology, Vuri Co., Ltd., Xunxing Co., Ltd., Hangmin Co., Ltd. Hong Kong stocks recommend focusing on: Jingyuan International, Shenzhou International, Yuyuan Group, etc. The clothing and home textile sector suggests focusing on: (1) Leading high-end brand companies that have benefited from K-type differentiation of consumption and the collective volume of online high customer unit prices. Since the beginning of the year, leading companies in the outdoor sub-industry have benefited from the boom in the industry. (2) The competitive pattern of the industry is stable, leading companies in the home textile sub-industry, leading companies in the menswear sub-industry, leading companies in the children's clothing sub-industry, etc., which have a stable position as leading companies and high dividend rates. (3) Industry leading companies involved in new consumer businesses such as IP licensing business and cultural and creative process products business within the sector. Biyin Levin, Rollei Life, Sanfu Outdoor, Colisse, Desu Fashion, Langzi, Heilan House, Youngor, Semma Apparel, Mercury Home Textiles, Fuana, Jinhong Group, Peacebird, Robust Healthcare, etc. Hong Kong stocks recommend focusing on: Jiangnan Buyi, Bosideng, Anta Sports, Li Ning, 361 Degrees, Tep International, Taobo, Winner Fashion, China Lilang, Beautiful Garden Healthcare, etc.
Risk Alerts
There is a risk of macroeconomic decline, exchange rate fluctuations, and large fluctuations in raw material prices.