Guosheng: In July, China's apparel exports accelerated growth, with differentiated performances among textile manufacturing stocks in the first half of 2026.

Guosheng released a research report stating that recently, Vietnam's textile and footwear export amounts experienced a steady slight increase year-on-year, while China's apparel export amounts accelerated growth in July. There are differences in revenue among downstream garment manufacturers, with a growing divergence in profits. Some companies in the upstream textile manufacturing sector benefited from the rise in raw material prices, entering a stage of profit release in the short term, while subsequent performance expectation changes will be closely monitored. Currently, global downstream brand merchants are placing orders relatively cautiously, and multiple factors impacting the industry could affect the profitability of the supply chain in the first half of 2026. The trend for the third quarter of 2026 remains unclear, but profitability in the fourth quarter of 2026 is expected to recover, warranting attention to future changes in fundamental expectations. Guosheng's main points are as follows: Industry Exports Recently, Vietnam's textile and footwear export amounts saw a steady slight year-on-year increase, while Chinas apparel export amounts accelerated growth in July. 1) China: From January to July 2026, the export amount for clothing and apparel accessories was $89.40 billion, up 0.9% year-on-year (with a year-on-year increase of 8.5% in July); the export amount for textile yarns, fabrics, and their products was $85.34 billion, up 3.9% year-on-year (with a year-on-year increase of 6.4% in July). 2) Vietnam: From January to July 2026, the total export amount for textiles was $22.86 billion, up 1.2% year-on-year (with a year-on-year increase of 1.8% in July); the total export amount for footwear was $14.18 billion, up 0.7% year-on-year (with a year-on-year increase of 1.6% in July). Monthly Shipments Recently, some apparel manufacturing companies disclosed their revenue for July, with Ruohong performing notably. In July 2026, revenues for Fengtai Enterprises/Ruohong/YUE YUEN IND (manufacturing sector) were up 1.0%/23.3%/-10.0% year-on-year, respectively (cumulative from January to July 2026: -3.0%/+6.0%/-5.5%), showing significant differences among individual stocks, and the monthly data exhibited considerable fluctuations. Interim Performance and Operating Trends 1. Downstream Garment Manufacturing: 1) Revenue differences exist: The global retail market for apparel remains relatively stable, but visibility of orders from garment manufacturers has decreased, leading to disparities in revenue among different companies. 2) Profit divergence has intensified: Factors such as exchange rates, tariff policies, and raw material prices have put pressure on the profit margins of some garment manufacturers in the first half of 2026, such as Huali Industrial Group (2026 Q2 revenue down 10% year-on-year/ net profit down 37% year-on-year), SHENZHOU INTL (2026 H1 revenue down 5% year-on-year/ net profit down 40% year-on-year), and YUE YUEN IND (2026 H1 revenue down 2% year-on-year/ net profit down 58% year-on-year), with expectations for gradual recovery in the second half of 2026. Some companies performed relatively well in terms of short-term orders and results, such as CRYSTAL INTL (2026 H1 revenue up 5% year-on-year/ net profit up 11% year-on-year), Zhejiang Jasan Holding Group (2026 Q2 revenue up 4% year-on-year/ net profit excluding non-recurring items up 9% year-on-year), and Zhejiang Weixing Industrial Development (2026 Q2 revenue and net profit both up 19% year-on-year). 2. Upstream Textile Manufacturing: Some companies in this sector benefited from rising raw material prices, entering a phase of profit release in the short term (e.g., Zhejiang Xinao Textiles Inc., Bros Eastern Co., Ltd), with subsequent performance expectation changes to be monitored closely. Risk Warning: Weak consumer spending and fluctuations in the consumption environment; new business development and optimization not meeting expectations; risks associated with fluctuations in exchange rates, raw material prices, and tariff policies.