Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the textile and apparel industry [1]. Core Insights - The report highlights that Chaohongji plans to go public in Hong Kong, and Xuezhongfei has proposed a strategic initiative of "brand enhancement and innovative breakthroughs" [1][6]. - The jewelry business of Chaohongji achieved a revenue of 392.4 million yuan in the first half of 2025, with a year-on-year growth of 21.2%, while the handbag business saw a decline of 17.4% [17][18]. - The report notes a significant increase in same-store sales for Chaohongji's jewelry business, with self-operated stores growing by 26.5% and franchise stores by 32.0% in the first half of 2025 [18]. Summary by Sections Industry Performance - The textile and apparel sector saw a decline of 0.26% this week, while the light industry manufacturing sector fell by 0.58%. The SW textile and apparel sector outperformed the market by 0.19 percentage points [19]. - The SW textile manufacturing sub-sector increased by 0.76%, and the SW apparel and home textile sub-sector rose by 0.66% [19]. Company Performance - The report lists the top five companies in the textile and apparel sector by weekly performance: Taimushi (+61.05%), Hongdou (+26.14%), Baoxini (+22.51%), Xingye Technology (+19.90%), and Xinhua Jin (+10.39%) [28]. - Conversely, the bottom five performers included Mankalon (-10.80%), Laishen Tongling (-8.78%), Meibang Apparel (-7.48%), Mingpai Jewelry (-7.35%), and Dia Shares (-7.05%) [28]. Industry Data Tracking - The report provides insights into raw material prices, noting that the cotton price index was 15,283 yuan/ton, with a month-on-month increase of 0.2% [33]. - For the first eight months of 2025, China's textile and apparel exports amounted to 94.513 billion and 102.761 billion USD, reflecting a year-on-year growth of 1.6% and a decline of 1.7%, respectively [48]. - In August 2025, the domestic retail sales totaled 3.97 trillion yuan, with a year-on-year growth of 3.4% [55]. Industry News - Skechers has completed its privatization and delisting from the New York Stock Exchange, with a transaction price exceeding 9 billion USD [6][67]. - Xuezhongfei debuted its new ice and snow series at the China International Fashion Week, emphasizing its strategic goal to become the leading brand in China's ice and snow down jackets [68][70]. - VF Corporation announced the sale of its Dickies brand for 600 million USD to Bluestar Alliance, aligning with its strategy to focus on core outdoor brands [71][73].

Investment Rating - The report maintains an investment rating of "Synchronize with the market" for the textile and apparel industry [2][27]. Core Insights - In August 2025, domestic retail sales (社零) grew by 3.4% year-on-year, slightly below market expectations, with a total retail sales amounting to 3.97 trillion yuan [5][6]. - The retail sales growth for the textile and apparel sector in the first eight months of 2025 was 2.9%, with a notable increase in sports and entertainment products, which saw a growth of 20.6% [8][10]. - The online retail channel continues to outperform the overall retail market, with a year-on-year growth of 6.4% in physical goods online sales [6][10]. Summary by Sections Retail Performance - In August 2025, the year-on-year growth rates for dining and goods retail were 2.1% and 3.6%, respectively [5]. - The consumer confidence index in July 2025 was 89.0, reflecting a 1.1 point increase [5]. Channel Analysis - Online channels showed a year-on-year growth of 6.4% in physical goods, while offline channels like convenience stores and supermarkets demonstrated stable performance [6]. - For the first eight months of 2025, retail sales in convenience stores, supermarkets, department stores, specialty stores, and brand stores grew by 6.6%, 4.9%, 1.2%, 5.2%, and 1.7%, respectively [6]. Sector-Specific Insights - The jewelry sector saw a significant year-on-year growth of 16.8% in August 2025, with gold prices reaching an average of 775.92 yuan per gram, up 36.7% year-on-year [7][11]. - The textile and apparel sector's year-on-year growth was 3.1% in August 2025, with a marginal improvement compared to previous months [7][10]. Investment Recommendations - The report recommends focusing on brands like 361 Degrees, with a noted increase in revenue growth among major sports brands [8][10]. - For the textile manufacturing sector, it suggests tracking the recovery of Nike, which could positively impact overall sector valuations [10].

Core Insights - The sports footwear industry is essential for daily life, with designs tailored for various sports and everyday use, emphasizing cushioning and shock absorption [1] Group 1: Business Models in the Sports Footwear Industry - The industry has developed two main business models: 1. Separation of brand operation and manufacturing, where brands like Nike and Adidas focus on brand value and marketing while outsourcing production to specialized manufacturers [1] 2. Integrated brand operation and manufacturing, where companies like Guirenniao and Wanlima handle both branding and production, although some outsourcing occurs [1] Group 2: Market Size and Forecast - The global sports footwear market is projected to grow from 570.5 billion in 2020 to 935.6 billion in 2023, with a compound annual growth rate (CAGR) of 2.4% from 2019 to 2023, and expected to exceed 1,400 billion by 2028 [2] - The global sports footwear manufacturing market is expected to grow from 134 billion in 2019 to 186.9 billion in 2023, with a CAGR of 8.7%, and is projected to surpass 280 billion by 2028 [5] - The Chinese sports footwear manufacturing market is anticipated to grow from 23.4 billion in 2019 to 47.8 billion in 2023, with a CAGR of 19.6%, and is expected to exceed 70 billion by 2028 [5] Group 3: Industry Trends - There is a deepening partnership between leading sports brands and specialized manufacturers, with brands relying on quality manufacturers for production while manufacturers depend on brand orders for growth [8] - The automation level in sports footwear production is increasing due to rising labor costs, enhancing efficiency and quality while reducing costs [9][10] Group 4: Competitive Landscape - The sports footwear manufacturing industry is highly concentrated in Asia, with Taiwanese manufacturers gaining a competitive edge during the industry shift, leveraging technology and production quality [11] - Chinese brands like Anta, Li Ning, and Peak are emerging strongly, supported by a mature supply chain and deepening collaborations with international brands [11]

Core Insights - Yue Yuen Industrial Holdings Limited reported a net operating income of approximately $650 million for August 2025, representing a year-on-year decrease of 8.8% [1] - The cumulative net operating income for the first eight months was approximately $5.382 billion, showing a slight year-on-year decrease of 0.5% [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分 內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 由於寶成工業於今日公佈上述每月綜合收益，當中包括本公司之相關財務資料，故本 公司根據香港聯合交易所有限公司證券上市規則（「上市規則」）第13.09(2)條及證券及 期貨條例（第571章）（「證券及期貨條例」）第XIVA部刊發本公告，確保及時向投資 者提供最新資料。下列項目乃摘錄自本公司及其附屬公司之未經審核管理賬目。 * 僅供識別 1 月份：二零二五年八月 按年之變動百分比詳情載於下表內： （於百慕達註冊成立之有限公司） （股份代號：00551） 二零二五年八月之每月收益公告 按照國際會計準則，本公司被視為臺灣證交所上市公司寶成工業之附屬公司， 現時透過其附屬公司間接持有本公司之控制權益。寶成工業根據臺灣證券交易所規 例規定刊發每月收益公告。 由於寶成工業於今日公佈其若干綜合財務資料，故本公司根據上市規則第13.09(2)條及 證券及期貨條例第XIVA部刊發本公告，確保及時向投資者提供最新資料。 按照國 ...

YUE YUEN INDUSTRIAL (HOLDINGS) LIMITED 裕 元 工 業（ 集 團 ）有 限 公 司 * (Incorporated in Bermuda with limited liability) （ 司） 於百慕達註冊成立之有限公 （Stock Code 00551 股份代號: ） NOTIFICATION LETTER 通知信函 September 9, 2025 Notes: This letter is in English and Chinese. In case of any inconsistency, the English version shall prevail. 各位非登記股東 （附註1） ： 裕元工業（集團）有限公司（「本公司」） －刊發二零二五年中期報告（「本次公司通訊」）之登載通知 Dear non-registered Shareholder(s) (Note 1) , Yue Yuen Industrial (Holdings) Limited (the "Company") – Notification of Publication of Inte ...

YUE YUEN INDUSTRIAL (HOLDINGS) LIMITED 裕 元 工 業（ 集 團 ）有 限 公 司 * (Incorporated in Bermuda with limited liability) （ 司） 於百慕達註冊成立之有限公 （Stock Code 00551 股份代號: ） NOTIFICATION LETTER 通知信函 Dear registered Shareholder(s), Yue Yuen Industrial (Holdings) Limited (the "Company") – Notification of Publication of Interim Report 2025 (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communication are now available on the Company's website at www.yueyuen.com and the ...

[Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of the company's fundamental information, including board members and key appointments [Company Information Overview](index=3&type=section&id=Company%20Information%20Overview) This section discloses basic information for Yue Yuen Industrial (Holdings) Limited as of August 11, 2025, including board members, company secretary, authorized representatives, registered office, principal place of business in Hong Kong, auditor, share registrar, and principal bankers, noting the resignation of CFO Shi Zhihong and the appointment of Zou Zhiming on August 11, 2025 - Chief Financial Officer Shi Zhihong resigned on August 11, 2025, and Zou Zhiming was appointed as the new CFO on the same day[8](index=8&type=chunk) - The Board of Directors includes executive directors (Lu Jinzhu as Chairman, Tsai Pei-Chun as Managing Director) and independent non-executive directors[8](index=8&type=chunk) - The company's principal bankers include ANZ Bank, BNP Paribas, Citibank, and others[10](index=10&type=chunk) [Financial and Operational Highlights](index=4&type=section&id=Financial%20and%20Operational%20Highlights) This section summarizes key financial and operational metrics for the period, indicating revenue growth but a decline in profit indicators [Financial and Operational Highlights Overview](index=4&type=section&id=Financial%20and%20Operational%20Highlights%20Overview) This section outlines the company's key financial and operational metrics for the six months ended June 30, 2025, including footwear shipments, revenue, profit, EPS, key financial ratios, total employees, and capital expenditure, showing slight revenue growth but declining profit indicators, alongside increases in employee count and capital expenditure Key Financial Performance for H1 2025 | Metric | 2025 (Million USD) | 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,060.1 | 4,015.4 | 1.1% | | Gross Profit | 918.6 | 975.1 | -5.8% | | Operating Profit | 207.0 | 259.3 | -20.2% | | Profit Attributable to Owners of the Company | 171.2 | 184.4 | -7.2% | | Basic Earnings Per Share (US Cents) | 10.67 | 11.44 | -6.8% | | Interim Dividend Per Share (HKD) | 0.40 | 0.40 | 0.0% | Operating Metrics for H1 2025 | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Footwear Shipments (Million Pairs) | 126.7 | 120.7 | 5.0% | | Total Employees | 292,300 | 277,000 | 5.5% | | Capital Expenditure (Million USD) | 146.0 | 93.8 | 55.7% | Profitability Ratios for H1 2025 | Metric | 2025 (%) | 2024 (%) | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Gross Profit Margin | 22.6 | 24.3 | -1.7 | | Operating Profit Margin | 5.1 | 6.5 | -1.4 | | Profit Attributable to Owners of the Company Margin | 4.2 | 4.6 | -0.4 | - In terms of solvency, the leverage ratio increased from **18.1% in 2024** to **19.6% in 2025**, and the net leverage ratio shifted from a net cash position in 2024 to a **1.7% net debt position in 2025**[11](index=11&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=5&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) This section presents the auditor's review report on the condensed consolidated financial statements, concluding no material misstatements [Conclusion of Review Report](index=5&type=section&id=Conclusion%20of%20Review%20Report) Deloitte Touche Tohmatsu reviewed Yue Yuen Industrial (Holdings) Limited's condensed consolidated financial statements for the six months ended June 30, 2025, finding no matters indicating material non-compliance with HKAS 34, despite the review scope being less than an audit - The auditor found no matters indicating that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[16](index=16&type=chunk) - The scope of the review is substantially less than an audit, and therefore no audit opinion is expressed[15](index=15&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[15](index=15&type=chunk) [Interim Results](index=6&type=section&id=Interim%20Results) This section details the company's interim financial performance, including statements of profit or loss, comprehensive income, financial position, equity changes, and cash flows, along with explanatory notes [Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section discloses the company's profit or loss for the six months ended June 30, 2025, showing slight revenue growth but increased cost of sales, selling and distribution expenses, and administrative expenses, leading to declines in gross profit, profit before tax, profit for the period, and basic earnings per share Key Data from Condensed Consolidated Statement of Profit or Loss for H1 2025 | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,060,148 | 4,015,407 | 1.1% | | Cost of sales | (3,141,576) | (3,040,320) | 3.3% | | Gross profit | 918,572 | 975,087 | -5.8% | | Profit before tax | 221,325 | 265,200 | -16.5% | | Profit for the period | 182,305 | 203,971 | -10.7% | | Basic earnings per share (US Cents) | 10.67 | 11.44 | -6.8% | [Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the company's comprehensive income for the six months ended June 30, 2025, where a decrease in profit for the period was offset by a significant improvement in other comprehensive income (expense) due to a positive shift in exchange differences on translating foreign operations, resulting in an overall increase in total comprehensive income Key Data from Condensed Consolidated Statement of Comprehensive Income for H1 2025 | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 182,305 | 203,971 | -10.7% | | Exchange differences on translating foreign operations | 32,698 | (29,775) | Significantly improved | | Total comprehensive income for the period | 213,250 | 170,546 | 25.0% | - The exchange differences on translating foreign operations shifted from a negative value in the first half of 2024 to a positive value in the first half of 2025, which was the primary driver of comprehensive income growth[19](index=19&type=chunk) [Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides the company's asset, liability, and equity status as of June 30, 2025, showing a slight decrease in non-current assets, increases in both current assets and current liabilities, leading to a marginal rise in net current assets, while total assets less current liabilities and total equity maintained stable growth Key Data from Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Metric | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 3,520,586 | 3,530,430 | -0.3% | | Current assets | 3,919,122 | 3,844,924 | 1.9% | | Current liabilities | 1,828,978 | 1,769,779 | 3.3% | | Net current assets | 2,090,144 | 2,075,145 | 0.7% | | Total equity | 4,934,857 | 4,914,354 | 0.4% | - Current bank borrowings increased from **357,616 thousand USD** as of December 31, 2024, to **568,387 thousand USD** as of June 30, 2025[23](index=23&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section details the company's equity changes for the six months ended June 30, 2025, where the increase in total equity was primarily driven by profit for the period and positive exchange differences from overseas operations, despite dividend distributions and share award scheme adjustments - As of June 30, 2025, total equity was **4,934,857 thousand USD**, an increase from **4,914,354 thousand USD** as of January 1, 2025[25](index=25&type=chunk) - Profit for the period of **171,190 thousand USD** and exchange differences on translating foreign operations of **21,163 thousand USD** were the main contributors to equity growth[25](index=25&type=chunk) - Dividends of **183,950 thousand USD** were distributed during the period, share award schemes resulted in the purchase of shares totaling **3,705 thousand USD**, and equity-settled share-based payments of **1,397 thousand USD** were recognized[25](index=25&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section reports the company's cash flows for the six months ended June 30, 2025, showing a decrease in net cash from operating activities, a significant increase in net cash used in investing activities, and a substantial reduction in net cash used in financing activities, ultimately leading to a net decrease in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows for H1 2025 | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 110,407 | 173,650 | -36.4% | | Net cash used in investing activities | (140,123) | (51,369) | 172.8% (outflow increased) | | Net cash used in financing activities | (63,848) | (337,677) | -81.1% (outflow decreased) | | Net decrease in cash and cash equivalents | (93,564) | (215,396) | -56.5% (decrease narrowed) | - Net cash used in investing activities significantly increased, primarily due to higher payments for property, plant, and equipment[29](index=29&type=chunk) - Net cash used in financing activities significantly decreased, primarily due to a substantial increase in new bank borrowings[31](index=31&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for various items in the condensed consolidated financial statements, covering accounting policies, revenue classification, taxation, dividends, earnings per share, asset changes, fair value measurement of financial instruments, financial guarantees, and share award schemes, offering essential context and details for understanding the financial data - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and incorporate the first-time application of amendments to Hong Kong Accounting Standard 21, which had no significant impact[33](index=33&type=chunk)[35](index=35&type=chunk) Revenue Composition for H1 2025 | Business Segment | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Manufacturing business | 2,797,981 | 2,634,404 | | Retail business | 1,262,167 | 1,381,003 | | Sports/Outdoor Footwear (as % of total revenue) | 53.6% | 51.7% | - Income tax expense for the first half of 2025 was **39,020 thousand USD**, with **2,860 thousand USD** recognized for the first time as current tax expense under Pillar Two rules[43](index=43&type=chunk) - As of June 30, 2025, **109.0 million USD** of disputed tax has been provisionally paid for the Indonesian tax dispute, with **40.5 million USD** recognized as additional income tax expense and late payment interest, and the remainder as recoverable tax and other receivables[46](index=46&type=chunk)[47](index=47&type=chunk) - The Board resolved to declare an interim dividend of **HKD 0.40 per share**, consistent with the prior year period[52](index=52&type=chunk) - Purchases of property, plant, and equipment for the period amounted to **142,479 thousand USD**, higher than **78,387 thousand USD** in the prior year period[56](index=56&type=chunk) - Bank credit guarantees were provided for joint ventures and associates, with guaranteed amounts of **32,796 thousand USD** and **20,700 thousand USD**, respectively[69](index=69&type=chunk) - Both the Yue Yuen Share Award Scheme and the Pou Sheng Share Award Scheme experienced changes in share grants, vesting, and lapses[71](index=71&type=chunk)[72](index=72&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's performance, financial condition, and future outlook, covering business review, operating results, liquidity, and capital structure [Business Review](index=27&type=section&id=Business%20Review) As a leading global footwear manufacturer and sports retailer, Yue Yuen faced global economic uncertainties in H1 2025, yet its manufacturing business saw robust demand, with footwear shipments and average selling prices recovering, while its retail business (Pou Sheng) faced challenges in mainland China but achieved steady online sales, with the company continuing its commitment to ESG and talent development, earning multiple external recognitions - Despite challenges such as tariffs, inflation, and geopolitical conflicts, footwear exports from major Southeast Asian producing countries continued to grow (**Vietnam +10.1%**, **Indonesia +13.6%**), while China's footwear exports decreased by **7.2%**[74](index=74&type=chunk) - The manufacturing business experienced robust overall footwear product demand, sustained improvement in multi-brand orders, full production lines, steady growth in footwear shipments, and a recovery in average selling prices[75](index=75&type=chunk) - The retail business was affected by weak consumer confidence and high inventory in mainland China, resulting in soft foot traffic and intense discount competition; Pou Sheng focused on enhancing omnichannel capabilities, achieving steady online sales growth, which partially alleviated offline pressure[75](index=75&type=chunk) - Yue Yuen achieved high scores in S&P Global Corporate Sustainability Assessment, was included in "The Sustainability Yearbook (China Edition) 2025," and received a **"B-" rating for CDP Water Security** and a **"B" rating for Climate Change**, with an **MSCI ESG rating of "BB"**[77](index=77&type=chunk)[78](index=78&type=chunk) [Operating Results](index=29&type=section&id=Operating%20Results) During the reporting period, the company's revenue slightly increased, but profit attributable to owners of the company decreased, with manufacturing revenue growing, footwear shipments and average selling prices rising, though gross margin was impacted by rising costs, while retail revenue declined and gross margin was affected by promotional competition, with continued investment in product development and updates on taxation and tax disputes - Revenue increased by **1.1%** to **4,060.1 million USD**, but profit attributable to owners of the company decreased by **7.2%** to **171.2 million USD**[81](index=81&type=chunk) - Footwear manufacturing revenue increased by **8.3%** to **2,610.8 million USD**, footwear shipments rose by **5.0%** to **126.7 million pairs**, and the average selling price increased by **3.2%** to **20.61 USD per pair**[82](index=82&type=chunk) - Revenue contributed by Pou Sheng decreased by **8.6%** to **1,262.2 million USD**, with a net closure of **40 stores**, but omnichannel sales grew by approximately **16%** year-on-year[83](index=83&type=chunk) - Overall gross profit margin decreased by **1.7 percentage points** to **22.6%**, and the manufacturing business gross profit margin decreased by **1.4 percentage points** to **17.7%**, primarily due to uneven capacity utilization, unmet production efficiency targets, and rising labor costs[90](index=90&type=chunk) - Product development expenses reached **70.8 million USD**, allocated to sample production, digital prototyping, technology and process re-engineering, and enhancing production efficiency[94](index=94&type=chunk) - Income tax expense for the period was **39.0 million USD**, with the effective tax rate decreasing to **17.6%** (compared to **23.1%** in the prior year period)[95](index=95&type=chunk) - After excluding non-recurring items, recurring profit attributable to owners of the company decreased by **9.0%** to **162.8 million USD**[96](index=96&type=chunk) [Revenue Analysis](index=29&type=section&id=Revenue%20Analysis) This section details the composition and changes in the company's revenue during the reporting period, showing significant growth in footwear manufacturing revenue, with sports/outdoor footwear remaining the primary source, while retail revenue declined, but online sales performed strongly - Footwear manufacturing revenue increased by **8.3%** to **2,610.8 million USD** compared to the prior year period[82](index=82&type=chunk) - Footwear shipments increased by **5.0%** to **126.7 million pairs**, and the average selling price rose by **3.2%** to **20.61 USD per pair**[82](index=82&type=chunk) - Sports/outdoor footwear accounted for **83.4%** of footwear manufacturing revenue and **53.6%** of total revenue[82](index=82&type=chunk) - Revenue contributed by Pou Sheng decreased by **8.6%** to **1,262.2 million USD** (RMB **9,159.4 million**, a decrease of **8.3%**)[83](index=83&type=chunk) - Retail business's offline direct-operated and franchised channels significantly declined, but omnichannel sales grew by approximately **16%** year-on-year, with live streaming sales more than doubling[83](index=83&type=chunk) - As of June 30, 2025, Pou Sheng operated **3,408 directly-operated retail stores** in Greater China, with a net closure of **40 stores**[83](index=83&type=chunk) [Production Review](index=30&type=section&id=Production%20Review) This section reviews the company's production performance during the reporting period, including footwear shipments, average selling prices, and the distribution across major production regions - The manufacturing business shipped a total of **126.7 million pairs** of footwear, an increase of **5.0%** compared to the prior year period[88](index=88&type=chunk) - The average selling price per pair of footwear was **20.61 USD**, an increase of **3.2%** from **19.98 USD** in the prior year period[88](index=88&type=chunk) - Indonesia, Vietnam, and mainland China remained the main production regions, accounting for **53%**, **32%**, and **10%** of total footwear shipments, respectively[88](index=88&type=chunk) [Cost and Expense Review](index=31&type=section&id=Cost%20and%20Expense%20Review) This section details the company's cost and expense composition and changes during the reporting period, showing declines in both gross profit and gross profit margin, primarily due to rising labor costs in manufacturing and promotional competition in retail, while selling and distribution expenses and administrative expenses as a percentage of revenue decreased - Gross profit decreased by **5.8%** to **918.6 million USD**, and the overall gross profit margin decreased by **1.7 percentage points** to **22.6%**[90](index=90&type=chunk) Manufacturing Business Cost of Sales Analysis for H1 2025 | Cost Category | 2025 (Million USD) | 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Major raw material costs | 995.2 | 925.1 | 7.6% | | Direct labor costs and manufacturing overheads | 1,307.2 | 1,206.7 | 8.3% | | Total cost of sales | 2,302.4 | 2,131.8 | 8.0% | - Manufacturing business gross profit margin decreased by **1.4 percentage points** to **17.7%**, primarily due to uneven production line utilization, unmet production efficiency targets, and rising labor costs[90](index=90&type=chunk) - Pou Sheng's gross profit margin decreased by **0.7 percentage points** to **33.5%**, affected by promotional competition and increased average discount rates[91](index=91&type=chunk) - Selling and distribution expenses decreased by **5.9%** to **399.0 million USD**, representing approximately **9.8%** of revenue (compared to **10.6%** in the prior year period)[91](index=91&type=chunk) - Administrative expenses increased by **2.8%** to **283.0 million USD**, representing approximately **7.0%** of revenue (compared to **6.9%** in the prior year period)[92](index=92&type=chunk) - Net operating expenses decreased by **4.2 million USD** to **711.6 million USD**, representing approximately **17.5%** of revenue (compared to **17.8%** in the prior year period)[92](index=92&type=chunk) [Product Development](index=32&type=section&id=Product%20Development) During the reporting period, the company continued to increase investment in product development, focusing on innovative technologies and sustainable materials, and collaborated with clients to drive digital transformation to enhance development, mass production, and delivery efficiency - Product development expenses reached **70.8 million USD** (compared to **68.8 million USD** in the prior year period)[94](index=94&type=chunk) - Investments were made in projects such as sample production and digital prototyping, technology and process re-engineering, and improving production efficiency[94](index=94&type=chunk) - Independent product R&D centers were established for major brand clients, incorporating innovative technology elements and sustainable materials, and collaborating with clients to implement digital transformation[94](index=94&type=chunk) [Finance Costs, Taxation, and Tax Dispute Update](index=32&type=section&id=Finance%20Costs,%20Taxation,%20and%20Tax%20Dispute%20Update) During the reporting period, interest expenses on bank borrowings and finance costs for lease liabilities both decreased, while income tax expense reduced, the effective tax rate lowered, and current tax expense under Pillar Two rules was recognized for the first time, with the Indonesian tax dispute fully provisionally paid, and a portion recognized as recoverable tax - Interest expense on bank borrowings was **22.4 million USD** (compared to **26.9 million USD** in the prior year period)[95](index=95&type=chunk) - Finance costs for lease liabilities were **4.0 million USD** (compared to **5.1 million USD** in the prior year period)[95](index=95&type=chunk) - Total income tax expense was **39.0 million USD**, with an effective tax rate of **17.6%** (compared to **23.1%** in the prior year period)[95](index=95&type=chunk) - Current tax expense of **2.86 million USD** under Pillar Two rules was recognized for the first time[95](index=95&type=chunk) - **109.0 million USD** of disputed tax for the Indonesian tax dispute has been provisionally paid, with **40.5 million USD** recognized as additional income tax expense and late payment interest, and the remainder as recoverable tax and other receivables; no additional tax expense was recognized in the current period[95](index=95&type=chunk) [Recurring Profit Attributable to Owners of the Company](index=32&type=section&id=Recurring%20Profit%20Attributable%20to%20Owners%20of%20the%20Company) During the reporting period, non-recurring profit attributable to owners of the company increased, primarily from gains on disposal of an associate and fair value changes of financial instruments, while recurring profit decreased after excluding non-recurring items - Non-recurring profit attributable to owners of the company was **8.4 million USD** (compared to **5.5 million USD** in the prior year period), primarily comprising a gain on disposal of an associate of **3.4 million USD** and a gain from fair value changes of financial instruments of **5.0 million USD**[96](index=96&type=chunk) - After excluding non-recurring items, recurring profit attributable to owners of the company was **162.8 million USD**, a decrease of **9.0%** compared to the prior year period[96](index=96&type=chunk) [Liquidity, Financial Resources, Capital Structure, and Other Information](index=33&type=section&id=Liquidity,%20Financial%20Resources,%20Capital%20Structure,%20and%20Other%20Information) During the reporting period, the company experienced a decrease in net cash from operating activities and a significant increase in net cash used in investing activities, resulting in free cash outflow, while its financial position remained sound, but the leverage ratio increased, shifting from a net cash to a net debt position, with the company primarily meeting funding needs through operating cash flow and bank borrowings, and focusing on optimizing capital structure and managing foreign exchange risk - Net cash from operating activities decreased to **110.4 million USD**; free cash outflow was **35.6 million USD** (compared to an inflow of **79.9 million USD** in the prior year period), primarily due to increased capital expenditure payments[98](index=98&type=chunk) - Bank balances and cash were **882.3 million USD**, and total bank borrowings were **968.2 million USD**; the leverage ratio increased to **19.6%**, shifting from net cash of **185.9 million USD** to net borrowings of **85.8 million USD**[99](index=99&type=chunk) - The current ratio was **2.1** (compared to **2.2** at year-end), with current assets of **3,919.1 million USD** and current liabilities of **1,829.0 million USD**[99](index=99&type=chunk) - The company primarily meets its funding needs through operating cash flows and bank borrowings, with some bank financing incorporating ESG elements[100](index=100&type=chunk) - Overall capital expenditure was **146.0 million USD** (compared to **93.8 million USD** in the prior year period), with manufacturing business capital expenditure at **129.6 million USD** and Pou Sheng's capital expenditure at **16.4 million USD**[104](index=104&type=chunk) - Plans are underway to invest approximately **276 million USD** in establishing a production base in Tamil Nadu, India, with preliminary engineering work already commenced[105](index=105&type=chunk) - The manufacturing business faces foreign exchange risk between the US dollar and local currencies (such as Vietnamese Dong and Indonesian Rupiah), which is hedged through forward contracts[111](index=111&type=chunk) - Share of results of associates and joint ventures recorded a profit of **32.5 million USD**, largely consistent with the prior year period[112](index=112&type=chunk) [Cash Flow](index=33&type=section&id=Cash%20Flow) During the reporting period, net cash from operating activities decreased, net cash used in investing activities significantly increased, and net cash used in financing activities substantially reduced, resulting in a net decrease in cash and cash equivalents - Net cash from operating activities was **110.4 million USD** (compared to **173.7 million USD** in the prior year period), a decrease of **36.4%**[98](index=98&type=chunk) - Free cash outflow was **35.6 million USD** (compared to an inflow of **79.9 million USD** in the prior year period), primarily due to payments for capital expenditure projects committed in the previous year[98](index=98&type=chunk) - Net cash used in investing activities was **140.1 million USD** (compared to an outflow of **51.4 million USD** in the prior year period)[98](index=98&type=chunk) - Net cash used in financing activities was **63.8 million USD** (compared to an outflow of **337.7 million USD** in the prior year period)[98](index=98&type=chunk) - Net decrease in cash and cash equivalents was **84.3 million USD** (compared to **223.9 million USD** in the prior year period)[98](index=98&type=chunk) [Financial Position and Liquidity](index=33&type=section&id=Financial%20Position%20and%20Liquidity) The company's financial position remained sound, but the leverage ratio increased, shifting from a net cash to a net debt position, with the current ratio slightly decreasing but still maintaining a healthy level - Bank balances and cash were **882.3 million USD** (December 31, 2024: **943.2 million USD**)[99](index=99&type=chunk) - Total bank borrowings were **968.2 million USD** (December 31, 2024: **757.3 million USD**)[99](index=99&type=chunk) - The leverage ratio (total bank borrowings to total equity) was **19.6%** (December 31, 2024: **15.4%**)[99](index=99&type=chunk) - As of June 30, 2025, the Group's net borrowings were **85.8 million USD** (December 31, 2024: net cash of **185.9 million USD**)[99](index=99&type=chunk) - The current ratio was **2.1** (December 31, 2024: **2.2**)[99](index=99&type=chunk) [Funding Sources and Capital Structure](index=33&type=section&id=Funding%20Sources%20and%20Capital%20Structure) The company primarily meets its funding needs through operating cash flows and bank borrowings, considering the impact of debt and equity financing on weighted average cost of capital and leverage ratio, with some bank financing incorporating ESG elements, and manufacturing business primarily using USD-denominated long-term floating-rate borrowings, while retail business mainly uses RMB-denominated fixed-rate borrowings - Current and future funding needs are primarily met through multiple sources, including operating cash flows and bank borrowings[100](index=100&type=chunk) - When choosing between debt and equity financing, the impact on weighted average cost of capital and leverage ratio is considered, with a commitment to reducing costs and maintaining an appropriate leverage ratio[100](index=100&type=chunk) - Some bank financing arrangements have incorporated ESG elements[100](index=100&type=chunk) - Almost all bank borrowings for the manufacturing business are denominated in USD and bear interest at floating rates; bank borrowings and cash balances for the retail business are mostly held in RMB, primarily with fixed-rate borrowings[102](index=102&type=chunk)[103](index=103&type=chunk) - Approximately **51.6%** of total bank borrowings were long-term bank loans[100](index=100&type=chunk) [Capital Expenditure](index=34&type=section&id=Capital%20Expenditure) During the reporting period, the company's overall capital expenditure significantly increased, primarily for capacity expansion and digital transformation in the manufacturing business, while retail capital expenditure decreased, focusing on refined retail strategies - Overall capital expenditure was **146.0 million USD** (compared to **93.8 million USD** in the prior year period), a year-on-year increase of **55.7%**[104](index=104&type=chunk) - Capital expenditure for the manufacturing business was **129.6 million USD** (compared to **67.4 million USD** in the prior year period), primarily for strategic expansion and strengthening manufacturing capacity, and precise investment in digital transformation[104](index=104&type=chunk) - Pou Sheng's capital expenditure decreased to **16.4 million USD** (compared to **26.4 million USD** in the prior year period), used for selective opening and upgrading of physical stores, and optimizing the SAP ERP system[104](index=104&type=chunk) [Significant Investments Held and Plans for Future Significant Investments or Acquisitions of Capital Assets](index=34&type=section&id=Significant%20Investments%20Held%20and%20Plans%20for%20Future%20Significant%20Investments%20or%20Acquisitions%20of%20Capital%20Assets) No significant investments or M&A activities occurred during the reporting period, but the company plans to invest approximately **276 million USD** in a production base in Tamil Nadu, India, with preliminary engineering already underway, and future progress dependent on market demand and government approvals - There were no significant investments or major acquisitions and disposals during the reporting period[105](index=105&type=chunk) - Plans are to invest approximately **23 billion Indian Rupees** (approximately **276 million USD**) in establishing a production base in Tamil Nadu, India, with preliminary related engineering construction already commenced and progressing in an orderly manner[105](index=105&type=chunk) - This investment project will be funded by internal resources and/or bank borrowings[105](index=105&type=chunk) - The Group currently has no plans for asset acquisitions, but may have other significant investment or capital asset acquisition plans in the future to support sustainable growth[106](index=106&type=chunk)[107](index=107&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=35&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates,%20and%20Joint%20Ventures) During the reporting period, the company did not undertake any significant acquisition or disposal activities related to subsidiaries, associates, or joint ventures - During the reporting period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[109](index=109&type=chunk) [Contingent Liabilities](index=35&type=section&id=Contingent%20Liabilities) The company provided financial guarantees to banks for its joint ventures and associates - The Group has provided bank guarantees for its joint ventures and associates to obtain bank credit[110](index=110&type=chunk) Financial Guarantee Contracts as of June 30, 2025 | Guaranteed Party | Guaranteed Amount (Thousand USD) | Amount Utilized (Thousand USD) | | :--- | :--- | :--- | | Joint ventures | 32,796 | 22,453 | | Associates | 20,700 | 149 | [Foreign Exchange Risk](index=35&type=section&id=Foreign%20Exchange%20Risk) The manufacturing business faces foreign exchange risk between the US dollar and local currencies (e.g., Vietnamese Dong, Indonesian Rupiah), which is hedged through forward contracts, while the retail business, primarily denominated in RMB, has relatively lower exchange rate risk - All revenue from the manufacturing business is denominated in USD, most costs for materials and components are paid in USD, while local expenses such as wages, utilities, and local fees are paid in local currencies; the Group uses forward contracts for hedging[111](index=111&type=chunk) - Most revenue from the Greater China retail business is denominated in RMB, and almost all expenses are also paid in RMB[111](index=111&type=chunk) [Share of Results of Associates and Joint Ventures](index=35&type=section&id=Share%20of%20Results%20of%20Associates%20and%20Joint%20Ventures) During the reporting period, the company's share of results from associates and joint ventures recorded a profit of **32.5 million USD**, largely consistent with the prior year period - Share of results of associates and joint ventures collectively recorded a profit of **32.5 million USD**, compared to a total profit of **32.9 million USD** in the prior year period[112](index=112&type=chunk) [Employees](index=36&type=section&id=Employees) As of June 30, 2025, the company's total employee count increased, with manufacturing staff rising and retail staff decreasing, while the company remains committed to talent development, competitive compensation, and promoting a diverse, equitable, and inclusive corporate culture, adhering to Fair Labor Association standards Total Employees as of June 30, 2025 | Business Segment | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Employees | 292,300 | 277,000 | 5.5% | | Manufacturing Business Employees | 273,100 | 256,300 | 6.6% | | Retail Business Employees | 19,200 | 20,700 | -7.2% | - The company believes talent is a crucial asset for the Group, planning comprehensive systems for recruitment, utilization, development, and retention, while offering competitive compensation and comprehensive employee benefits programs[115](index=115&type=chunk) - Committed to fostering a diverse workplace, promoting a corporate culture of diversity, equity, and inclusion among employees, and as the world's first and only FLA-accredited footwear supplier, pledging to adhere to the FLA Workplace Code of Conduct[115](index=115&type=chunk) [Outlook](index=37&type=section&id=Outlook) Despite escalating global economic headwinds, the company remains optimistic about the long-term prospects of the sports industry, and in the short term, it will actively monitor the political and economic environment, promote diversified capacity layout, prioritize rapid response, and consolidate profitability and market leadership through digital transformation, cost and expense control, and refined retail strategies - Despite escalating global economic headwinds, the Group remains optimistic about the long-term prospects of the sports industry and confident in its role as a strategic supplier[117](index=117&type=chunk) - In the short term, challenges include reciprocal tariffs, inflation, slowing consumer confidence, and the impact of geopolitical conflicts on shipping logistics, leading to volatile operating environment and order visibility[117](index=117&type=chunk) - The company will continue to actively monitor the political and economic environment, promote medium-to-long-term capacity layout strategies, including diversified allocation targeting regions such as Indonesia and India[117](index=117&type=chunk) - Adopting rapid response as a core guiding principle, the company will drive comprehensive plans, including prudent evaluation of workforce arrangements and expansion timelines, balancing demand, order scheduling, and labor supply[117](index=117&type=chunk) - The SAP ERP system and Integrated Operations Platform (OCP) are expected to be fully launched by the end of 2025, and in the future, an excellent manufacturing system will be built through gradually piloted AI agents and ecological intelligence module tools[118](index=118&type=chunk) - Retail subsidiary Pou Sheng will continue to dynamically deploy its physical and omnichannel retail footprint through refined retail strategies, but still faces revenue and profitability pressure in the short term[119](index=119&type=chunk) [Other Information](index=38&type=section&id=Other%20Information) This section covers additional corporate information, including interim dividend details, share registration, directors' and major shareholders' interests, share award schemes, and corporate governance practices [Interim Dividend](index=38&type=section&id=Interim%20Dividend) The Board has resolved to declare an interim dividend of **HKD 0.40 per share**, consistent with the prior year period, with payment scheduled for October 9, 2025, and the company remains committed to a long-term relatively stable dividend policy - The Board has resolved to pay an interim dividend of **HKD 0.40 per share** for the six months ended June 30, 2025 (2024: **HKD 0.40 per share**)[121](index=121&type=chunk) - The interim dividend will be paid on **October 9, 2025**[121](index=121&type=chunk) - The Group will continue to strive for a long-term relatively stable dividend policy[121](index=121&type=chunk) [Closure of Register of Members](index=38&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the company will close its register of members from September 16 to September 18, 2025, requiring all transfer documents to be lodged with the Hong Kong share registrar by 4:30 p.m. on September 15, 2025 - The company will suspend registration of members from **Tuesday, September 16, 2025**, to **Thursday, September 18, 2025**[122](index=122&type=chunk) - To qualify for the interim dividend, all transfer documents must be lodged with the Hong Kong share registrar by **4:30 p.m. on Monday, September 15, 2025**[122](index=122&type=chunk) - The record date for interim dividend entitlement will be **Tuesday, September 16, 2025**[122](index=122&type=chunk) [Directors' and Chief Executive's Interests in Securities](index=38&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Securities) This section discloses the interests of directors and chief executives in the shares of the company and its associated corporations (Pou Sheng, Pou Chen) as of June 30, 2025, including personal interests and those held through share award schemes Directors' Interests in the Company's Shares as of June 30, 2025 | Director's Name | Capacity | Total Shares Held (Long Position) | % of Issued Shares | | :--- | :--- | :--- | :--- | | Lu Jinzhu | Beneficial owner | 603,000 | 0.03% | | Chou Wei-Te | Beneficial owner | 80,000 | 0.00% | | Lin Chen-Tien | Beneficial owner | 334,000 | 0.02% | | Liu Hung-Chih | Beneficial owner | 859,000 | 0.05% | | Shih Chih-Hung | Beneficial owner | 61,000 | 0.00% | Directors' Interests in Pou Sheng's Shares as of June 30, 2025 | Director's Name | Capacity | Total Pou Sheng Shares Held (Long Position) | % of Pou Sheng's Issued Shares | | :--- | :--- | :--- | :--- | | Tsai Pei-Chun | Beneficial owner | 19,523,000 | 0.37% | | Liu Hung-Chih | Family interest | 414,000 | 0.01% | Directors' Interests in Pou Chen's Shares as of June 30, 2025 | Director's Name | Capacity | Total Pou Chen Shares Held (Long Position) | % of Pou Chen's Issued Shares | | :--- | :--- | :--- | :--- | | Lu Jinzhu | Beneficial owner | 1,143,770 | 0.04% | | Tsai Pei-Chun | Beneficial owner | 4,177,779 | 0.14% | | Lin Chen-Tien | Beneficial owner | 297,760 | 0.01% | | Shih Chih-Hung | Family interest | 40,000 | 0.00% | - Mr. Chou Wei-Te and Mr. Liu Hung-Chih each held interests in **80,000 shares** of the Company granted with vesting conditions[128](index=128&type=chunk) [Share Award Schemes](index=40&type=section&id=Share%20Award%20Schemes) This section details the terms, validity, grant limits, vesting conditions, and share movement during the reporting period for the Yue Yuen Share Option Scheme, Yue Yuen Share Award Scheme, and Pou Sheng Share Award Scheme - The Yue Yuen Share Option Scheme was adopted on **May 31, 2019**, for a term of ten years, with the total number of shares available for issue as of the reporting date representing approximately **10.06%** of the issued shares, but no share options have been granted since its adoption[129](index=129&type=chunk) - The Yue Yuen Share Award Scheme was adopted on **January 28, 2014**, and amended and restated on **November 13, 2023**, extending its validity for ten years to **January 27, 2034**; the total number of shares granted shall not exceed **2%** of the company's issued share capital on the grant date[130](index=130&type=chunk)[131](index=131&type=chunk) Yue Yuen Share Award Scheme Movements for H1 2025 | Type of Movement | Number of Shares | | :--- | :--- | | Balance at January 1 | 1,570,000 | | Granted during the period | 2,452,000 | | Vested | (2,062,000) | | Lapsed | (120,000) | | Balance at June 30 | 1,840,000 | - The Pou Sheng Share Award Scheme was adopted on **May 9, 2014**, and amended and restated on **November 13, 2023**, extending its validity for ten years to **May 8, 2034**; the total number of shares granted shall not exceed **4%** of Pou Sheng's issued shares[138](index=138&type=chunk)[141](index=141&type=chunk) Pou Sheng Share Award Scheme Movements for H1 2025 | Type of Movement | Number of Shares | | :--- | :--- | | Balance at January 1 | 22,080,000 | | Lapsed/Cancelled | (2,880,000) | | Balance at June 30 | 19,200,000 | [Arrangements for Purchase of Shares or Debentures](index=44&type=section&id=Arrangements%20for%20Purchase%20of%20Shares%20or%20Debentures) Except for shares purchased by the trustee of the Yue Yuen Share Award Scheme, neither the company nor its subsidiaries participated in any arrangements during the reporting period that would enable directors to benefit from acquiring shares or debt securities of the company or any other body corporate - Save as disclosed in the share award schemes, neither the company nor any of its subsidiaries participated in any arrangements during the period that would enable directors to acquire benefits by means of the purchase of shares or debt securities (including debentures) of the company or any other body corporate[146](index=146&type=chunk) - The trustee of the Yue Yuen Share Award Scheme purchased a total of **2,180,000 shares** on the Stock Exchange for a total consideration of approximately **3,705,000 USD** in accordance with the terms of the scheme[154](index=154&type=chunk) [Major Shareholders' Interests in Securities](index=45&type=section&id=Major%20Shareholders'%20Interests%20in%20Securities) This section discloses the interests of major shareholders in the company's securities as of June 30, 2025, with Pou Chen Corporation and its wholly-owned subsidiary Wealthplus Holdings Limited being the largest shareholders, holding over **50%** of the shares Major Shareholders' Interests in the Company's Securities as of June 30, 2025 | Shareholder Name | Capacity | Number of Shares Held (Long Position) | % of Issued Shares | | :--- | :--- | :--- | :--- | | Pou Chen Corporation | Interest in controlled corporation | 824,143,835 | 51.36% | | Wealthplus Holdings Limited | Interest in controlled corporation | 773,156,303 | 48.18% | | Merrill Lynch & Co. Inc. | Interest in controlled corporation | 99,315,703 | 6.18% | - Pou Chen Corporation holds shares in the company through its wholly-owned subsidiaries, Wealthplus Holdings Limited and Win Fortune Investments Limited[151](index=151&type=chunk) - Merrill Lynch & Co. Inc. held both long and short positions in the company's shares, with a short position of **109,341,792 shares** (**6.81%**)[148](index=148&type=chunk) [Update on Directors' Information Pursuant to Rule 13.51B(1) of the Listing Rules](index=46&type=section&id=Update%20on%20Directors'%20Information%20Pursuant%20to%20Rule%2013.51B(1)%20of%20the%20Listing%20Rules) This section updates changes in directors' information since the annual report's publication, including significant personnel changes such as the retirement of Zhan Luming, appointment of Chou Wei-Te, resignation of Shih Chih-Hung, and appointment of Zou Zhiming, as well as some directors' positions in other listed companies - Mr. Zhan Luming retired as an executive director effective **June 1, 2025**[155](index=155&type=chunk) - Mr. Chou Wei-Te was appointed as an executive director on **June 1, 2025**, and as an executive director of Eagle Nice (International) Holdings Limited on **June 30, 2025**[155](index=155&type=chunk) - Mr. Shih Chih-Hung resigned as executive director and Chief Financial Officer on **August 11, 2025**, and during the reporting period, was appointed as a director of San Fang Chemical Industry Co., Ltd. and Nan Pao Resins Chemical Co., Ltd., and resigned as an executive director of Eagle Nice[155](index=155&type=chunk) - Mr. Zou Zhiming was appointed as an executive director and Chief Financial Officer on **August 11, 2025**[155](index=155&type=chunk) [Review of Unaudited Interim Financial Report](index=47&type=section&id=Review%20of%20Unaudited%20Interim%20Financial%20Report) The company's Audit Committee (renamed Audit and Risk Management Committee) has reviewed the interim financial report, and external auditor Deloitte Touche Tohmatsu has issued an unqualified review report in accordance with Hong Kong Standard on Review Engagements 2410 - The company's Audit Committee (renamed Audit and Risk Management Committee effective **August 11, 2025**) has reviewed the accounting principles and practices adopted by the Group, together with management[156](index=156&type=chunk) - External auditor Deloitte Touche Tohmatsu has issued an unqualified review report in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[156](index=156&type=chunk) [Corporate Governance](index=47&type=section&id=Corporate%20Governance) The company is committed to maintaining high standards of corporate governance practices and complies with all applicable provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules - The company is committed to maintaining high standards of corporate governance practices by focusing on transparency, accountability, and responsibility to shareholders[157](index=157&type=chunk) - During the period, the company adopted the principles of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules and complied with all applicable code provisions[157](index=157&type=chunk) [Standard Code for Securities Transactions](index=47&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Standard Code as the code of conduct for directors' securities transactions and requires relevant employees to adhere to similar internal guidelines; all directors confirmed compliance with the Standard Code during the reporting period, with no non-compliance incidents found among relevant employees - The company has adopted the Standard Code as the code of conduct for directors' securities transactions[159](index=159&type=chunk) - Following specific enquiries made by the company to all directors, all directors confirmed their compliance with the standards set out in the Standard Code throughout the period[159](index=159&type=chunk) - Relevant employees of the company who may possess unpublished inside information have also been required to comply with internal guidelines similar to the provisions of the Standard Code; no incidents of non-compliance by relevant employees were found during the period[159](index=159&type=chunk) [Acknowledgement](index=47&type=section&id=Acknowledgement) The Chairman, on behalf of the Board, extends sincere gratitude to clients, suppliers, shareholders, fellow board members, and all employees - The Chairman takes this opportunity to express sincere gratitude to clients, suppliers, and shareholders for their continuous strong support[160](index=160&type=chunk) - The Chairman expresses deep appreciation for the valuable contributions of all Board members during the period and the tireless efforts and dedicated service of the Group's employees[160](index=160&type=chunk) [Directors](index=47&type=section&id=Directors) This section lists the Board of Directors members as of the reporting date and after executive director changes, including executive and independent non-executive directors - Executive Directors: Mr. Lu Jinzhu (Chairman), Ms. Tsai Pei-Chun (Managing Director), Mr. Chou Wei-Te, Mr. Lin Chen-Tien, Mr. Liu Hung-Chih, and Mr. Zou Zhiming (Chief Financial Officer)[161](index=161&type=chunk) - Independent Non-executive Directors: Mr. Wang Ke-Chin, Mr. Ho Lai-King, Mr. Lin Hsueh-Yuan, and Dr. Yang Ju-Hui[161](index=161&type=chunk)

FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: Yue Yuen Industrial (Holdings) Limited 裕元工業(集團)有限公司（於百慕達註冊成立之有限公司） 呈交日期: 2025年9月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00551 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 2,000,000,000 | HKD | | 0.25 | HKD | | 500,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | ...

Core Viewpoint - The company reported a mixed performance for the first half of 2025, with revenue growth in manufacturing but challenges in retail, indicating resilience in manufacturing amidst external pressures [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved a revenue of $4.06 billion, a year-on-year increase of 1.1%, while net profit attributable to shareholders decreased by 7.2% to $170 million [1]. - Q2 2025 saw a revenue decline of 0.4% to $2.03 billion, but net profit attributable to shareholders increased by 13% to $100 million [1]. - Manufacturing business revenue grew by 6.2% to $2.8 billion in H1 2025, with Q2 revenue increasing by 6.5% to $1.47 billion [1][2]. Group 2: Manufacturing Business Insights - The manufacturing segment showed resilience with a 5% increase in footwear shipment volume to 13 million pairs in H1 2025, and a capacity utilization rate maintained at 93% [1]. - Average selling price per pair increased by 3.2% to $20.6 in H1 2025, driven by improved product mix [1]. - However, the gross margin for the manufacturing business decreased by 1.4 percentage points to 17.7% in H1 2025, attributed to uneven capacity loads and rising labor costs [2]. Group 3: Retail Business Challenges - The retail segment faced significant pressure, with revenue declining by 8.3% to $9.16 billion in H1 2025, and a 14% drop in physical store revenue [2]. - The number of direct-operated stores decreased by 40 to 3,408, with same-store sales declining between 10% and 20% [2]. - Gross margin for the retail business fell by 0.7 percentage points to 33.5% in H1 2025, reflecting deeper discounts due to fluctuations in the consumer environment [2]. Group 4: Future Outlook - The company is expected to maintain steady growth in its manufacturing business, with projected revenue growth of 2.5%, 6%, and 5.4% for 2025-2027, reaching $8.38 billion, $8.88 billion, and $9.36 billion respectively [3]. - Net profit is anticipated to grow by 0.8%, 10.2%, and 6.9% during the same period, reaching $400 million, $440 million, and $470 million respectively [3]. - The company maintains a "buy" rating based on its growth prospects and supply chain expansion [3].