CITIC Securities: The textile manufacturing sector is expected to enter the configuration window in 2H26~1H27.

According to a research report from CITIC Securities, in the second quarter, brand apparel sales overall slowed down month-on-month due to fluctuations in weather and consumption environment, but still performed better than the overall performance of the social zero. Among them, sports shoe and apparel companies maintained steady operations, with inventory levels remaining relatively controllable. Textile manufacturing companies are expected to have varying performance due to fluctuations in raw material prices such as crude oil and cotton. Companies in the upstream cotton spinning, wool spinning, and chemical fiber sectors are expected to benefit from the increase in product prices driving inventory profit elasticity release, while contract manufacturing companies may face pressure on profit margins due to fluctuations in downstream demand, tariff sharing, raw material price increases, and exchange rate fluctuations. Looking ahead, with the joint disturbances of tariffs, exchange rates, demand, and rising costs, 2026 may be the most challenging year for the textile manufacturing sector. However, crises may also contain opportunities, and along with current stock prices and expectations reflecting headwinds, many contract factories are gradually entering the value range. We believe that the sector is expected to enter a configuration window in the 2H26 to 1H27 period; in the brand apparel sector, drawing on the experience of overseas leading brand companies emerging from the 2008 financial crisis, domestic brands are expected to seize the operational improvement opportunities brought by the retail recovery by refining their internal capabilities during the low point.