CITIC Securities: The textile manufacturing sector is gradually overcoming the short-term trough caused by the disturbance of US tariffs.

CITIC Securities research report indicates that in the first half of 2025, the textile and clothing manufacturing sector will continue to grow under the disturbance of tariffs, demonstrating strong business resilience and increasing concentration of leading companies. In the first half of the year, the gross and net profit margins of manufacturing factories were slightly under pressure due to short-term negative factors such as wage increases and production capacity adjustments. It is expected that as these negative disturbances subside, profit margins are expected to gradually improve by the end of the year. It is expected that in the second half of 2025, the net profits of various manufacturing factories may still be temporarily affected by tariff disturbances, but in the medium to long term, leading manufacturing companies are expected to benefit from new orders and production capacity, the subsiding of tariff disturbances, and the continuous improvement in intelligent manufacturing technology, maintaining steady growth year by year. CITIC Securities believes that the textile manufacturing sector is gradually overcoming the short-term downturn caused by the US tariff disturbances, and recommends grasping high certainty opportunities after a pullback and the sustained growth of leading companies in the industry.