VTech Holdings Limited 偉易達集團* Notification of Publication of 2025/2026 Interim Report ("Current Corporate Communication") and Arrangements on Electronic Dissemination of Corporate Communications (Incorporated in Bermuda with limited liability) ( 於百慕達註冊成立之有限公司 ) (Stock Code 股份代號：303) Dear Non-registered Shareholder(s), 2 December 2025 Should you have any queries relating to this letter, please call the telephone hotline of the Company at (852) 2667 3221 during business hours from 9:00 a.m. to 6:00 p.m., Mond ...

VTech Holdings Limited 偉易達集團* ( 於百慕達註冊成立之有限公司 ) (Stock code 股份代號：303) 各位登記股東： 二零二五╱二零二六中期報告書（「本次公司通訊」）之刊發通知 及以電子方式發布公司通訊之安排 本次公司通訊之刊發通知 偉易達集團*（「本公司」）本次公司通訊的英文版和中文版已上載於本公司網站 www.vtech.com 及香港聯合交易所有限公司（「聯交所」） 網站 www.hkexnews.hk。如 閣下欲收取本次公司通訊的印刷本，請以書面方式通知本公司的香港股份過戶登記分處（「香港股份過戶登記 處」）香港中央證券登記有限公司，地址為香港灣仔皇后大道東 183 號合和中心 17M 樓，或電郵至 investor_relations@vtech.com，本公司在收 到 閣下的要求後，將立即向 閣下免費發送本次公司通訊的印刷本。 以電子方式發布公司通訊之安排 根據香港聯合交易所有限公司證券上市規則（「上市規則」）第 2.07A 條以電子方式發布公司通訊規定，本公司已採用以電子方式發布公司通 訊（「公司通訊」）之安排，該公司通訊指本公司為向其任何證券持有人或投資大 ...

Financial Performance - For the first half of the fiscal year 2026, the company's revenue decreased by 9.0% to $999.1 million, down from $1.0897 billion in the same period last year[3]. - The profit attributable to shareholders fell by 14.5% to $74.7 million, primarily due to the decrease in revenue and an increase in operating expenses as a percentage of revenue[3]. - The gross profit margin improved slightly to 31.9%, compared to 31.5% in the same period last year, mainly due to a decrease in material costs[4]. - Operating profit decreased to $92.9 million, down $11.3 million or 10.8%, with the operating margin declining from 9.6% to 9.4%[41]. - Net profit attributable to shareholders was $74.7 million, a decrease of $12.7 million or 14.5%, with a net profit margin dropping from 8.0% to 7.5%[43]. - For the six months ended September 30, 2025, total revenue was $991.1 million, a decrease of 9.0% from $1,089.7 million in the same period of the previous fiscal year[37]. - Gross profit for the same period was $315.8 million, down $27.7 million or 8.1%, with a gross margin increase from 31.5% to 31.9%[40]. - The company reported a total comprehensive income of $83.6 million for the six months, compared to $103.5 million for the same period last year[54]. Revenue Breakdown - In North America, revenue decreased by 12.1% to $398.3 million, with electronic learning products experiencing a significant decline of 25.4% to $167 million[5][6]. - North America revenue for the six months ended September 30, 2025, totaled $398.3 million, with e-learning products contributing 41.9% ($167 million), contract manufacturing services 36.8% ($146.5 million), and telecommunications products 21.3% ($84.8 million)[15]. - In Europe, revenue decreased by 7.2% to $429 million, with e-learning products increasing by 5.5% to $144.6 million, while contract manufacturing services fell by 25.5% to $179.2 million[16][22]. - Telecommunications products in Europe saw a revenue increase of 24.5% to $105.2 million, driven by sales of home phones and smartphones, particularly the Gigaset product line[19][23]. - The Asia-Pacific region experienced a revenue decline of 5.6% to $150.4 million, with all three product categories reporting decreases[24]. - Revenue in other regions, including Latin America, the Middle East, and Africa, fell by 11.3% to $13.4 million, with electronic learning products increasing by 5.3% to $8 million, offset by a 28.0% decline in telecommunications products to $5.4 million[28]. Product Development and Launches - The company launched several new products during the first half of the fiscal year, including the VTech Baby® 4-in-1 Steps & Stages Activity Center™ and LeapFrog's Strum & Count Wooden Guitar™[7]. - LeapFrog brand sales in Europe were boosted by new product launches, including LeapMove and LeapStart Reading Buddies, while the VTech brand saw declines in certain categories[17]. - The company is launching new core learning products in the U.S. to capitalize on the upcoming holiday season, supported by strong marketing initiatives[31]. Dividends and Shareholder Returns - The board declared an interim dividend of $0.17 per share, consistent with the dividend paid in the first half of the previous fiscal year[3]. - The company declared an interim dividend of 17.0 cents per share for the six months ending September 30, 2025, to be paid on December 19, 2025[137]. - The company has proposed a final dividend of $0.44 per share for the fiscal year ending March 31, 2025, down from $0.48 per share in the previous year, with a total estimated payout of $111.4 million[77]. Operational Efficiency - Research and development expenses decreased to $41.4 million, down 9.8% year-over-year, maintaining a ratio of 4.2% of total revenue[42]. - Cash and cash equivalents as of September 30, 2025, were $147.9 million, a decrease of $2.3 million from the previous year[46]. - Inventory increased to $451.0 million, with turnover days rising from 129 to 138 days compared to the same period last year[47]. - The average number of employees decreased to approximately 20,440, with employee-related costs around $198.6 million, down from $204.4 million in the previous year[52]. Future Outlook - The company expects a decline in overall revenue for the fiscal year 2026, but anticipates improved sales in the second half driven by growth in electronic learning and telecommunications products[30]. - Despite an expected annual decline in electronic learning product sales, the second half is projected to show improvement, supported by a rebound in the U.S. and continued growth in Europe[31]. - The telecommunications segment is expected to see revenue growth in fiscal year 2026, driven by new product launches in Europe and the U.S.[32]. Corporate Governance and Compliance - The board of directors has confirmed that they have dedicated sufficient time and attention to the company's affairs during the six months ending September 30, 2025[132]. - The company has adhered to all corporate governance codes as of September 30, 2025, except for a deviation regarding the separation of the roles of Chairman and CEO[130]. - The risk management and internal control mechanisms have been deemed effective and adequate as of September 30, 2025[134]. - The audit committee has reviewed the unaudited interim financial report for the six months ending September 30, 2025[131]. Share-Based Compensation - The company has adopted a new stock option plan to attract and retain employees, replacing the previous plan established in 2021[86]. - The total number of shares available for issuance under the share option and share award plans as of September 30, 2025, is 25,061,579 shares, representing 9.9% of the company's issued shares[89]. - The maximum entitlement for any participant under the share option plan is capped at 1% of the company's issued shares within any twelve-month period[90]. - The fair value of stock options granted is estimated using the Black-Scholes option pricing model, with significant assumptions affecting the valuation[98]. - The total expense related to share-based compensation for the six months ending September 30, 2025, was $1,900,000[112]. Legal and Regulatory Matters - The company has ongoing litigation related to intellectual property infringement and product liability, but the board believes it will not have a significant adverse impact on the financial position[122]. - The company has received a tax reassessment notice from the Hong Kong tax authority amounting to $8.8 million, of which $4.4 million has been deferred pending further legal review[75].

Core Insights - The Hong Kong Dividend Low Volatility ETF (520890) has seen a significant decrease in both share count and total assets in 2024, with shares down 41.46% and assets down 26.98% year-to-date [1][2] Fund Overview - The fund was established on September 4, 2024, with an annual management fee of 0.50% and a custody fee of 0.10% [1] - As of November 19, 2024, the fund's total shares stood at 72.08 million, with a total size of 107 million yuan [1] Performance Metrics - The fund manager, Li Qian, has achieved a return of 50.85% since taking over management on September 4, 2024 [2] - The fund's performance benchmark is the Hang Seng Stock Connect High Dividend Low Volatility Index [1] Liquidity Analysis - Over the last 20 trading days, the ETF has accumulated a trading volume of 843 million yuan, averaging 42.17 million yuan per day [1] - Year-to-date, the ETF has recorded a total trading volume of 4.22 billion yuan, with an average daily trading volume of 19.73 million yuan [1] Top Holdings - The ETF's top holdings include Shougang Resources (3.76%), Yanzhou Coal Mining (2.94%), and VTECH Holdings (2.76%), among others [2] - The total market value of the top holdings reflects a diversified investment strategy within the fund [2]

Core Insights - The article highlights the top short-selling stocks in the market, indicating significant investor sentiment and potential market movements [1][2]. Short Selling Ratios - AIA Group (81299), Li Ning (82331), and JD Health (86618) have the highest short-selling ratios at 100.00% each [1][2]. - JD Group (89618) follows closely with a short-selling ratio of 98.73%, while Tencent Holdings (80700) has a ratio of 94.71% [2]. Short Selling Amounts - Xiaomi Group (01810) leads in short-selling amount with 2.524 billion, followed by Alibaba (09988) at 2.305 billion and Tencent Holdings (00700) at 1.140 billion [1][2]. - Other notable mentions include Pop Mart (09992) with 1.016 billion and Lenovo Group (00992) at 676 million [2]. Deviation Values - Zhongyuan Bank (01216) has the highest deviation value at 62.66%, indicating a significant difference from its average short-selling ratio over the past 30 days [1][2]. - East Asia Bank (00023) and Autohome (02518) follow with deviation values of 38.85% and 38.65%, respectively [2].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Group 1 - The company VTech Holdings Limited (00303.HK) opened nearly 6% lower and is currently down 5.98%, trading at HKD 62.9 [1] - The trading volume for the company is reported at HKD 691,900 [1]

Group 1 - The core point of the article is that VTech Holdings Limited (00303) experienced a significant decline in its mid-term profits, with a year-on-year decrease of 14.53% and a nearly 6% drop in stock price following the announcement [1] Group 2 - For the six months ending September 30, 2025, the company reported revenue of $991 million, a decrease of 9.05% compared to the previous year [1] - The net profit attributable to shareholders was $74.7 million, reflecting a year-on-year decline of 14.53% [1] - Earnings per share were reported at 29.5 cents, and the company proposed an interim dividend of 17 cents per share [1] - The decline in profit was attributed to reduced revenue, an increase in the percentage of operating expenses relative to total revenue, and a rise in the effective tax rate [1] - The gross profit margin showed a slight improvement during the period [1]

Core Viewpoint - The company VTech Holdings Limited (00303) reported a decline in revenue and profit for the six months ending September 30, 2025, leading to a significant drop in its stock price [1] Financial Performance - The company achieved a revenue of $991 million, representing a year-on-year decrease of 9.05% [1] - Shareholders' profit amounted to $74.7 million, down 14.53% compared to the previous year [1] - Earnings per share were reported at 29.5 cents, with an interim dividend proposed at 17 cents per share [1] Cost and Taxation - The decline in profit was attributed to reduced revenue, an increase in the percentage of operating expenses relative to total revenue, and a rise in the effective tax rate [1] - There was a slight improvement in gross profit margin during the period [1]

Financial Performance - The group's revenue decreased by 9% to $991.1 million, primarily due to declines in all regions [2][4] - Gross profit reduced by 8.1% to $315.8 million, but gross profit margin improved from 31.5% to 31.9% due to lower material costs and favorable product mix [2][3] - Operating profit decreased by 10.8% to $92.9 million, with operating profit margin slightly down from 9.6% to 9.4% [3][4] - Profit attributable to shareholders fell by 14.5% to $74.7 million, with net profit margin decreasing from 8% to 7.5% [4] Business Line Performance - North America sales decreased by 12.1% to $398.3 million, driven by lower sales of electronic learning products (ELP) and telecom products [4][8] - European sales decreased by 7.2% to $429 million, with ELP revenue increasing by 5.5% to $144.6 million, offset by lower contract manufacturing services (CMS) sales [5][12] - Asia-Pacific revenue fell by 5.6% to $150 million, with declines across all product lines [17] - Other regions saw a revenue decrease of 11.3% to $13.4 million, primarily due to lower telecom product sales [5] Market Performance - North America accounted for 40.2% of group revenues, with ELP revenue down 25.4% due to tariff policy changes [8][11] - Europe remains the largest market, contributing 43.3% of revenue, with strong performance in telecom products [12][14] - Asia-Pacific represented 15.2% of overall revenue, with declines in ELP and telecom products [17] Company Strategy and Industry Competition - The company is expanding manufacturing capacity in Malaysia and exploring ODM opportunities to mitigate risks associated with geopolitical tensions and tariffs [20][30] - New product launches, including LeapMove and LeapStart Reading Buddies, are expected to drive sales growth in the second half of the financial year [20][21] - The company aims to maintain its leadership in electronic learning toys and telecom products despite challenging market conditions [8][12] Management Comments on Operating Environment and Future Outlook - The management noted that global business conditions remain challenging due to geopolitical tensions and fragile consumer confidence, leading to cautious order placements [19] - Full financial year revenue is still forecasted to decline, but second-half sales are expected to improve, particularly in ELPs and telecom products [20][21] - The company is optimistic about the performance of new products and the potential for recovery in lost sales from the first half [28][45] Other Important Information - The company declared an interim dividend of $17, unchanged from the previous year [4] - The net cash balance as of September 30, 2025, was $147.9 million, a decrease of 1.5% from the previous year [6] Q&A Session Summary Question: Growth prospects of new electronic learning products - Management expects new ELP products like LeapMove to drive higher growth in the future, with plans for numerous new product launches [22][23] Question: Integration of AI in future products - The company is exploring AI integration in product development, with ongoing projects in the development stage [24][25] Question: Recovery of lost sales in the US - Management indicated that while recovery is expected, overall ELP sales for the full year are still anticipated to be lower than last year [28][45] Question: Impact of tariffs and production shift to Malaysia - The current tariff rate for products from China to the US is 20%, with production in Malaysia providing a backup option [30][33] Question: Capital expenditure guidance - Capital expenditure for the first half of the fiscal year was $17 million, with a full-year forecast of $42 million [37] Question: M&A appetite post-Gigaset acquisition - The company remains open to M&A opportunities that enhance product breadth and technology [37] Question: Margin implications of dual production in China and Malaysia - The impact on margins from operating parallel facilities is minimal, with productivity differences being the main concern [38][41] Question: Capacity comparison between Malaysia and China - The Malaysian plant is expected to account for 25%-30% of total group capacity when fully operational [42]