Zhongtai: Home textiles' large single products drive growth, clothing industry slowly recovers under low base.

Zhongtai's research report stated that in the third quarter of 2025, the sportswear industry was affected by the warm autumn and weak consumer demand, with clear differentiation in demand. The running/outdoor category maintained high prosperity, with online channels outperforming offline channels. In the home textile industry, overall recovery momentum was moderate, but leading companies achieved growth surpassing the industry through the strategy of major single products. Shanghai Shuixing Home Textile successfully launched technological functional single products such as "ice cream quilts" and "ergonomic pillows," directly driving revenue acceleration. Additionally, the apparel industry is slowly recovering from a low base. The men's wear section remains steady but under pressure on the profit side, while the women's wear section shows signs of recovery, with cost optimization being key. Zhongtai's main points are as follows: Sportswear: Differentiated demand, resilience of leading companies evident Impacted by the warm autumn and weak consumer demand, the industry shows clear differentiation in demand, with the running/outdoor category maintaining high prosperity and online channels performing better than offline. ANTA SPORTS: The main brand's revenue increased by single digits year-on-year, while FILA's revenue increased by single digits year-on-year, and other brands achieved high growth of 45-50%, effectively offsetting market pressure with a multi-brand matrix. LI NING: Inventory-sales ratio stands at 5-6 months, expecting improvement in discount inventory by the end of the year. XTEP INT'L: The main brand's revenue increased by single digits year-on-year, with the sub-brand SKECHERS performing well, growing by over 20% year-on-year. 361 DEGREES: The main brand's offline/e-commerce revenue increased by 10%/20% respectively year-on-year, with the number of super stores reaching 93, showing continued growth. Home textile industry: Growth driven by major single products, significant profit recovery The industry's overall recovery is moderate, but leading companies have achieved growth surpassing the industry through the strategy of major single products. Shanghai Shuixing Home Textile's revenue in 25Q3 accelerated by 20.19%, driven by the successful launch of technological functional single products such as "ice cream quilts" and "ergonomic pillows," directly driving revenue growth and boosting gross profit margin by 4.2 percentage points to 44.74% year-on-year. Luolai Lifestyle Technology has also benefited from this, planning to develop "fitted sheets" into billion-dollar explosive products. Its revenue in 25Q3 increased by 9.90% year-on-year, with a gross profit margin increase of 3.8 percentage points to 48.05%. The major single product strategy drove Shanghai Shuixing Home Textile and Luolai Lifestyle Technology to achieve a substantial increase in net profit attributable to shareholders in 25Q3 by 43.18% and 50.14%, respectively. Shenzhen Fuanna Bedding and Furnishing is still in the stage of actively adjusting channels and destocking, with revenue declining by 7.58% in 25Q3, narrowing the decline each quarter. Additionally, Shenzhen Fuanna Bedding and Furnishing plans to launch memory pillows and fitted sheets as explosive products in early 2026, targeting a wider consumer base. Apparel industry: Slow recovery in 25Q3 from a low base, expecting inventory clearance during peak season in Q4 The men's wear segment remains stable overall, with some pressure on the profit side. In 25Q3, Hla Group Corp. saw a slight increase in revenue and profit, with steady performance in the main business, rapid expansion in new formats, and overseas business; Biem.L.Fdlkk Garment saw a slight increase in revenue but profit under pressure; Baoxiniao Holding saw revenue growth but greater profit decline; Joeone Co., Ltd. experienced a revenue decline. The women's wear segment shows signs of recovery, with cost optimization being key. Dazzle Fashion saw a double-digit increase in profit in 25Q3; Shenzhen Ellassay Fashion saw an overall revenue decline but expected growth in comparable domestic figures and profit turnaround; Xinheng saw a 10% revenue increase, but faced greater profit pressure; Jinhong saw a slight revenue decline but expects high-speed growth in IP licensing and cloud business. Mass leisure brands are still in adjustment phase. Senma saw revenue and profit growth in Q3, with improved cost control and a good start to Q4; Ningbo Peacebird Fashion experienced a quarterly loss in 25Q3 due to channel and cost structure adjustments. Investment recommendations: Sportswear: With intensified industry competition, companies are still firmly investing in brand building and are optimistic about the leading companies' ability to continuously increase market share in the stock era. It is recommended to focus on ANTA SPORTS (02020), which maintains long-term growth resilience despite a slowdown in short-term main brand growth, LI NING (02331), with significant profit elasticity around the "Olympics + technology", XTEP INT'L (01368) with outstanding advantages in the main brand's running specialization and bright performance by SKECHERS, and 361 DEGREES (01361) with high cost performance, aligned with consumer trends, increasing super stores, and high online growth. Home textile: "National subsidy continuation + recovery in demand for wedding and other scenes + improvement in penetration of technological sleep" driving marginal improvement, combined with leading high dividend attributes. It is recommended to focus on Shanghai Shuixing Home Textile (603365.SH), which has effectively demonstrated the impact of major single product strategy and efficient e-commerce performance, Luolai Lifestyle Technology (002293.SZ), benefiting from improved discount and channel structure as well as the recovery of overseas furniture business, and Shenzhen Fuanna Bedding and Furnishing (002327.SZ), with high dividend defense and expectations of improvement in destocking on the ground. Clothing brands: It is recommended to focus on Hla Group Corp., (600308.SH), the leading men's wear company with increasing contributions from Jingdong Outlet and FCC expansions, and Zhejiang Semir Garment (002563.SZ), a mass leader with profit turnaround in Q3 and expected improvements in margin due to the peak season and cost control. Jinhong Fashion Group (603518.SH) is also recommended for its marginal improvement, sustained high growth in new businesses (IP licensing, cloud silk), and continuous improvement in profitability. Risk warning: Risk of macroeconomic fluctuations, slower-than-expected domestic demand recovery, risk of delayed information updates in research reports, and risk of deviation from calculations and actual results.