Financial Performance - The company reported an unaudited consolidated profit attributable to shareholders of approximately $75.8 million for the three months ended March 31, 2025, down from $99.965 million in the same period last year, representing a decrease of 24.2%[4] - The overall gross profit for the three months ended March 31, 2025, was $464.3 million, down from $503.1 million in the previous year, indicating a decline of 7.7%[4] - The company's attributable profit was $75.8 million, a decrease of 24.2% compared to $100.0 million in the same period last year[14] - The company recorded a profit of $15.8 million from joint ventures and associates, slightly down from $16.2 million in the previous year[13] - The company’s total comprehensive income for the period was $91.9 million, compared to $80.6 million in the same period last year, an increase of 14.5%[5] - The company reported a non-recurring loss of $0.5 million, compared to a non-recurring profit of $0.4 million in the same period last year[14] Revenue and Sales - Revenue for the three months ended March 31, 2025, was $2,029.5 million, an increase of 1.3% compared to $2,003.6 million in the same period last year[8] - The total revenue from manufacturing activities, including footwear, soles, accessories, and others, was $1,328.3 million, reflecting a 5.9% increase year-on-year[9] - Revenue from the retail subsidiary, BaoSheng International, decreased by 6.5% to $701.2 million, compared to $749.7 million in the same period last year[9] - Total revenue for the three months ended March 31, 2025, was $2,029.5 million, a 1.3% increase from $2,003.6 million in the same period last year[10] Cost and Expenses - Gross profit decreased by 7.7% to $464.3 million, with a gross margin decline of 2.2 percentage points to 22.9%[11] - Sales and distribution expenses fell by 4.3% to $206.7 million, accounting for approximately 10.2% of total revenue[12] - The company experienced a 7.5% year-on-year increase in workforce, contributing to higher labor costs amid rising wages[7] - Other income decreased by 15.9% to $31.2 million, representing about 1.5% of total revenue[12] - The company’s financing costs decreased to $13.3 million from $17.1 million, a reduction of 22.1%[4] Market and Strategic Outlook - The company noted that the competitive e-commerce environment in mainland China continues to impact retail performance, with fluctuating customer traffic affecting sales conversion rates[7] - The company remains optimistic about the long-term prospects of the sports industry despite short-term economic uncertainties affecting order visibility for the second half of 2025[15] - The company plans to diversify its manufacturing capacity in Indonesia and India to support sustainable growth[15] - The company aims to enhance operational resilience and maintain healthy cash flow through rigorous cost control and long-term digital transformation strategies[16] Footwear Manufacturing - The footwear manufacturing revenue increased by 7.8% to $1,239.5 million, with a shipment volume rise of 5.3% to 61.9 million pairs, and an average selling price increase of 2.5% to $20.04 per pair[9]

Financial Performance - Revenue rose by 3.7% to $8,182.2 million compared to $7,890.2 million in 2023[10] - Profit attributable to owners increased by 42.8% to $392.4 million, up from $274.7 million in the previous year[10] - Basic earnings per share rose by 42.9% to 24.37 cents, compared to 17.05 cents in 2023[10] - The company reported a significant increase in orders, contributing to improved production efficiency and capacity utilization[30] - The company's overall revenue increased by 3.7% to approximately $8.2 billion, driven by strong performance in the manufacturing business[31] - The company reported a 42.8% increase in profit attributable to shareholders, reaching approximately $392.4 million[32] - The manufacturing business's total revenue was $5,620.8 million, reflecting an 11.1% increase from the previous year[49] - Gross profit rose by 3.5% to $1,992.7 million, with an overall gross margin of 24.4%[57] - The group achieved a gross profit margin of 24.4% for the fiscal year 2024, maintaining the same level as in 2023, while the operating profit margin increased to 6.7% from 5.1% in 2023[181] - The net profit margin improved to 5.2% in 2024, up from 3.9% in 2023, indicating a positive trend in profitability[181] Cash Flow and Dividends - Free cash flow decreased by 56.2% to $325.8 million, down from $744.1 million in 2023[10] - Cash flow from operating activities was $537.1 million, down from $944.7 million in 2023[66] - The company declared a total annual dividend of 1.30 HKD per share, a 44.4% increase from 0.90 HKD in 2023[10] - The board has declared a final dividend of HK$0.90 per share for 2025, up from HK$0.70 per share in 2023, resulting in a total annual dividend of HK$1.30 per share[81] - The company declared an interim dividend of HKD 0.40 per share for the six months ending June 30, 2024, and proposed a final dividend of HKD 0.90 per share, totaling approximately HKD 1,444,094,000, subject to shareholder approval[111] Operational Efficiency - The gross profit margin for the manufacturing business improved by 0.7 percentage points to 19.9%, achieving the highest operating profit margin since 2010[31] - Retail sales in the Greater China region decreased by 8.0% year-on-year in RMB terms, reflecting weak consumer confidence[30] - The company aims to fully implement the SAP ERP system and integrated operation platform by 2025 to enhance production efficiency[33] - The company is focusing on digital transformation and smart manufacturing to enhance short-term and long-term profitability[33] - The company plans to focus on optimizing store efficiency and selectively adjusting or renovating stores as part of its refined retail strategy[51] Market Trends and Demand - Total footwear shipments increased by 16.9% year-on-year to 255.3 million pairs in 2024[10] - Global footwear demand showed a significant recovery, with Vietnam's footwear exports rising by 13.0% to $22.9 billion in 2024[30] - The company’s sports/outdoor footwear accounted for 53.8% of total revenue, while casual shoes and sports sandals made up 9.4%[52] Sustainability and ESG - The company received a "BB" rating from MSCI ESG and improved its scores in various sustainability assessments, outperforming 87% of companies in the textile, apparel, and luxury goods sector[35] - The company’s ESG score improved to 48 in 2024 from 41 in 2023, outperforming 87% of companies in the textile, apparel, and luxury goods sector[45] - The company aims to achieve a 46.2% reduction in absolute greenhouse gas emissions by 2030, using 2019 as the baseline year[184] - The group plans to achieve carbon neutrality by 2025 through the procurement of renewable energy and enhancing energy efficiency[184] Employee and Governance - The group employed approximately 285,500 employees as of December 31, 2024, a 7.9% increase from 264,700 employees in 2023[83] - The board of directors includes a mix of executive and independent non-executive members, ensuring a diverse governance structure[121] - The company emphasizes the importance of employee development and communication channels, including internal websites and surveys, to enhance talent capital and sustainable competitiveness[189] Risk Management - The company has established a risk management framework to address various operational risks, including labor law compliance and data security, by hiring local experts and implementing high-security communication systems[195][197] - The company is focused on diversifying its revenue sources by continuously analyzing brand client orders and exploring new brands and profit sources to mitigate operational risks[198] - The company is prepared to activate contingency plans in response to significant events or abnormal price fluctuations affecting operational costs[200] Capital Expenditure and Investments - The group’s total capital expenditure for 2024 is $211.3 million, an increase from $200.6 million in 2023, with manufacturing capital expenditure at $159.8 million, up from $152.0 million[72] - The group plans to invest approximately ₹23 billion (approximately $276 million) in a production base in an economic zone in Tamil Nadu, India, with the project already underway[73] - The company invested $142.2 million in product development, focusing on innovation and sustainable materials[62] Shareholder Relations - The total number of issued shares is 1,604,556,486 shares[135] - The company has adopted stock option and share award plans to incentivize directors and eligible employees, aligning their interests with the company's performance[127] - The company confirmed a net expense of $2,766,000 related to the Yu Yuan Share Incentive Plan for the year ending December 31, 2024, as equity-settled share-based payments[147]

Investment Rating - The report maintains a "Buy" rating for the company with a target price yet to be specified [5] Core Viewpoints - The company anticipates a decline in net profit for Q1 2025, projecting a decrease of no more than 25% compared to the same period in 2024, primarily due to rising production costs and decreased efficiency [1] - The manufacturing business showed stable growth with Q1 revenue around $2.03 billion, reflecting a year-on-year increase of 1.3%, while retail revenue decreased by 5.4% [2] - The company holds an optimistic outlook for the mid to long-term development, expecting a 6% compound annual growth rate in the global sports goods industry from 2024 to 2029, with the market size projected to reach $548 billion by 2029 [3] - The company is implementing organizational restructuring and cost-reduction plans to enhance overall profitability, while also focusing on digital smart manufacturing management [3] Summary by Sections Q1 Performance - The company forecasts a net profit of approximately $100 million for Q1 2025, with a reduction of up to 25% compared to the previous year [1] - The manufacturing segment's revenue is expected to grow by 5.9% year-on-year, while retail sales are projected to decline by 5.4% [2] Long-term Growth Prospects - The company is confident in its sustainable growth potential, driven by strong demand for quality suppliers in the global footwear and sports industry [3] - Despite short-term uncertainties such as global tariffs and inflation, the company believes its strategies will solidify its core operational strengths [3] Financial Projections - Revenue forecasts for 2025 to 2027 are adjusted to $8.4 billion, $8.9 billion, and $9.5 billion respectively, with net profits projected at $400 million, $430 million, and $480 million [4] - Corresponding EPS estimates are revised to $0.25, $0.27, and $0.30, with PE ratios of 6x, 5x, and 5x [4]

Core Viewpoint - The company anticipates a decrease of no more than 25% in profit attributable to shareholders for the three months ending March 31, 2025, compared to the same period in 2024, primarily due to fluctuations in the global economic environment and rising manufacturing costs [1] Financial Performance - The expected profit for the period is projected to be less than $75 million, down from $100 million in the same period last year [1] - The decline in profit is attributed to increased operational challenges and higher costs associated with footwear manufacturing, including decreased production efficiency and rising labor costs [1]

Investment Rating - The report recommends "Buy" for leading sports brands like Anta Sports and Li Ning, indicating strong operational resilience and growth potential in a challenging retail environment [5][27]. Core Insights - The sports industry demonstrated strong operational resilience in 2024, with major companies like Anta Sports, Li Ning, Xtep International, and 361 Degrees showing varied revenue growth rates of +13.58%, +3.90%, -5.36%, and +19.59% respectively [1][7]. - The report anticipates continued stable growth for leading sports brands in 2025, with projections for Anta's main brand to maintain high single-digit growth and FILA to achieve mid-single-digit growth [13][14]. Summary by Sections Performance Review - Anta Sports and FILA maintained steady operations, with revenue reaching 70.826 billion CNY, while 361 Degrees capitalized on lower-tier markets, achieving a revenue increase of 19.59% to 10.074 billion CNY [1][10]. - Li Ning's revenue remained stable, with a focus on e-commerce and product diversification, leading to a 10.3% increase in online sales [9]. Marketing and Inventory Management - Anta Sports increased its sales expense ratio to 36.21%, reflecting higher investments in new product promotions and channel expansion [2][16]. - Inventory turnover days improved for Xtep International, decreasing by 10 days to 79 days, while 361 Degrees saw an increase in turnover days due to strategic inventory buildup for e-commerce [2][17]. Manufacturing Sector - Major manufacturers like Wah Lee Group and Shenzhou International reported revenue growth of 19.35% and 14.79% respectively, driven by increased demand and efficient operations [3][22]. - The overall profitability of the manufacturing sector improved, with Wah Lee's net profit margin at 15.36% and Shenzhou's gross margin increasing to 28.10% [20][21]. Investment Recommendations - The report suggests that leading sports brands like Anta Sports and Li Ning are well-positioned to outperform the industry due to their operational strengths and market strategies [5][27]. - For the manufacturing sector, Wah Lee Group is recommended as a strong player, with potential for increased market share amid industry consolidation due to external pressures [5][27].

Investment Rating - The investment rating for the company is "Outperform the Market" [2] Core Views - The company has shown significant improvement in manufacturing capacity utilization, achieving a 14-year high in operating profit margin (OPM) [6] - The overall revenue for 2024 is projected to increase by 3.7% to $8.182 billion, with a notable rise in manufacturing revenue by 11.1% [6] - The net profit for 2024 is expected to rise by 42.8% to $392 million, with a net profit margin improvement of 1.3 percentage points to 4.8% [6] - The company is facing a tax dispute in Indonesia, which has impacted the net profit margin by approximately 0.5 percentage points, but recovery of funds is anticipated [6] - The retail segment has maintained a good profitability level despite a revenue decline of 8% [6] Financial Data and Forecast - Key financial data for the company includes: - Revenue (million USD): 2023: 7,890; 2024: 8,182; 2025E: 8,470; 2026E: 8,720; 2027E: 8,976 [6][10] - Net Profit (million USD): 2023: 275; 2024: 392; 2025E: 449; 2026E: 468; 2027E: 496 [6][10] - Fully Diluted EPS (USD): 2023: 0.17; 2024: 0.24; 2025E: 0.28; 2026E: 0.29; 2027E: 0.31 [6][10] - Gross Margin (%): 2023: 24.40%; 2024: 24.35%; 2025E: 24.35%; 2026E: 24.53%; 2027E: 24.67% [6][10] - Return on Equity (%): 2023: 6.48%; 2024: 8.84%; 2025E: 9.86%; 2026E: 10.02%; 2027E: 10.32% [6][10] Market Performance - The company's stock closed at HKD 12.86 on March 19, 2025, with a market capitalization of HKD 20,635 million [2] - The stock has experienced a 52-week price fluctuation between HKD 7.75 and HKD 18.40 [2] - The company has shown resilience in a challenging market environment, with a significant increase in manufacturing output and profitability [6]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a revenue of USD 8.182 billion for 2024, reflecting a year-on-year growth of 4%, and a net profit attributable to shareholders of USD 392 million, which is a significant increase of 43% [3][5] - The manufacturing segment is operating at full capacity, with a revenue increase of 11.1% to USD 5.62 billion in 2024, driven by a recovery in the footwear market and improved production efficiency [3][5] - The retail segment experienced a decline in revenue by 8% to RMB 18.45 billion, primarily due to reduced foot traffic and store adjustments, although online sales grew by 16% [3][5] Financial Data and Earnings Forecast - Revenue projections for the company are as follows: - 2023: USD 7.890 billion - 2024: USD 8.182 billion - 2025E: USD 8.654 billion - 2026E: USD 9.082 billion - 2027E: USD 9.464 billion - Net profit attributable to shareholders is forecasted to be: - 2023: USD 275 million - 2024: USD 392 million - 2025E: USD 489 million - 2026E: USD 546 million - 2027E: USD 592 million [3][12] - The company’s PE ratio is projected to decrease from 10 in 2023 to 5 in 2027, indicating a favorable valuation trend [3][12] Operational Efficiency - The manufacturing business achieved a gross margin increase to 19.9%, up by 0.7 percentage points year-on-year, due to enhanced capacity utilization and operational efficiency [3][5] - Inventory turnover days for the manufacturing segment decreased to 51 days, indicating improved inventory management [3][5] Dividend Policy - The company plans to distribute a final dividend of HKD 0.9 per share, resulting in a total annual dividend of approximately HKD 1.3 per share, with a payout ratio of 69% and a dividend yield of around 10% [3][5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company reported a revenue of $8.2 billion for 2024, a year-on-year increase of 3.7%, and a net profit attributable to shareholders of $390 million, up 43% year-on-year. The manufacturing segment generated $5.6 billion in revenue, an 11% increase year-on-year, while the retail segment saw a revenue decline of 10% to $2.6 billion [1][5] - Manufacturing business orders are robust, with a significant increase in shipments and a narrowing decline in average selling price (ASP). The ASP for 2024 was $20.3, down 5% year-on-year, while shipments reached 260 million pairs, a 17% increase [2][5] - The retail business is showing signs of improvement, with a smaller revenue decline in Q4 and effective cost management strategies leading to stable profit margins. Online retail revenue grew by 16%, with Douyin sales doubling year-on-year [4][5] Summary by Sections Financial Performance - For 2024, the company achieved a revenue of $8.2 billion and a net profit of $390 million. The manufacturing segment contributed $5.6 billion, while the retail segment accounted for $2.6 billion [1][5] - In Q4 alone, the company reported a revenue of $2.1 billion, an 11% increase year-on-year, but net profit dropped by 52% to $70 million due to increased operational costs and tax disputes [1][3] Manufacturing Business - The manufacturing segment's revenue for 2024 was $5.6 billion, with a shipment volume of 260 million pairs, reflecting a 17% increase. The ASP remained stable at $20.3 [2][5] - The manufacturing gross margin was 19.9%, with a capacity utilization rate of 93%. However, Q4 gross margin was pressured due to increased overtime and outsourcing costs, alongside a tax dispute in Indonesia [3][5] Retail Business - The retail segment's revenue for 2024 was $2.6 billion, down 10% year-on-year, but the decline in Q4 was only 2%. The company managed to improve its gross margin to 34.2% through effective discount management [4][5] - The number of offline stores decreased to 3,448, with same-store sales down 17.1%. However, online sales showed resilience, particularly on platforms like Douyin [4][5] Earnings Forecast and Valuation - The company is expected to achieve revenues of $8.4 billion, $9.0 billion, and $9.6 billion for 2025, 2026, and 2027, respectively, with corresponding net profits of $454 million, $498 million, and $529 million [5][12] - The projected P/E ratios for the next three years are 6.0, 5.5, and 5.2, with a dividend payout ratio of 69% for 2024, translating to a dividend yield of 10% [5][12]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of USD 8.182 billion for 2024, reflecting a year-on-year growth of 4%, and a net profit attributable to shareholders of USD 392 million, which is a significant increase of 43% [3][5] - The manufacturing business is operating at full capacity, with an increase in operational efficiency leading to a gross margin rise [3] - The retail segment is experiencing a decline in physical store sales but shows strong growth in online sales, contributing to an overall improvement in gross margin [3] - The company is the largest sports shoe manufacturer globally and has a strong presence in the sports retail sector, indicating a robust position in the industry [3] Financial Data and Profit Forecast - Revenue projections for the company are as follows: - 2023: USD 7.890 billion - 2024: USD 8.182 billion - 2025E: USD 8.654 billion - 2026E: USD 9.082 billion - 2027E: USD 9.464 billion - Net profit attributable to shareholders is forecasted to grow from USD 275 million in 2023 to USD 489 million in 2025E, and further to USD 592 million by 2027E [3][12] - The earnings per share (EPS) is expected to increase from 17.05 cents in 2023 to 30.49 cents in 2025E [3][12] Operational Efficiency - The manufacturing business achieved a capacity utilization rate of 93% in 2024, up from 79% in FY23, contributing to a gross margin increase of 0.7 percentage points to 19.9% [3] - The retail business saw a decline in physical store sales but a 16% increase in online sales, leading to a gross margin improvement of 0.5 percentage points to 34.2% [3] Dividend Policy - The company proposed a final dividend of HKD 0.9 per share, resulting in a total annual dividend of approximately HKD 1.3 per share, with a payout ratio of 69% and a dividend yield of about 10% [3]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at HKD 13.28, expecting a relative return of over 20% within the next six months [6][14]. Core Insights - The company reported a revenue of USD 8.2 billion for FY24, reflecting a 4% year-on-year increase. Manufacturing revenue was USD 5.6 billion, up 11%, while retail revenue was RMB 18.5 billion, down 8% [1][2]. - The gross profit margin stood at 24.4%, with manufacturing gross margin at 19.9%, an increase of 0.7 percentage points, driven by strong demand for footwear orders and improved production efficiency [1]. - The company aims to leverage the "athleisure" trend and enhance its manufacturing capabilities through automation and R&D, focusing on sustainable growth in regions like Indonesia and India [3]. Financial Performance - The net profit attributable to shareholders was USD 390 million, a significant increase of 43% year-on-year [2]. - The footwear shipment volume reached 255 million pairs, marking a 17% increase, with Indonesia accounting for 54% of shipments, up 29% [2]. - The average selling price (ASP) was USD 20.3, down 5% [2]. Future Outlook - The company plans to balance volume and price for sustainable growth, while enhancing operational resilience and efficiency through rigorous cost management [3]. - The revenue forecasts for FY25, FY26, and FY27 are projected at USD 8.7 billion, USD 9.3 billion, and USD 10.0 billion, respectively, with net profits expected to be USD 500 million, USD 550 million, and USD 620 million [5].