Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - The company reported a revenue of $6.075 billion for the first three quarters of 2024, a year-on-year increase of 1.5%, with a gross margin of 24.2% and a net profit attributable to shareholders of $332 million, reflecting a significant year-on-year increase of 140.9% [2]. - The manufacturing segment showed strong performance with a revenue of $4.136 billion, up 9.0% year-on-year, driven by increased demand for footwear products [2]. - The retail segment faced challenges with a revenue decline of 11.6% year-on-year, but effective cost control measures helped improve profitability [2]. Summary by Sections Financial Performance - For Q3 2024, the company achieved a revenue of $2.060 billion, a 12.5% increase year-on-year, with a gross margin of 24.1% [2]. - The net profit for Q3 2024 was $147 million, up 172.3% year-on-year [2]. - The overall net profit margin for the first three quarters was 5.5%, an increase of 3.2 percentage points year-on-year [2]. Manufacturing Business - The manufacturing business maintained a high capacity utilization rate of 92%, significantly up from 76% in the previous year [2]. - The footwear shipment volume increased by 16.2% year-on-year, although the average selling price decreased by 6.8% to $20.24 per pair [2]. - The net profit attributable to shareholders from the manufacturing segment was $302 million for the first three quarters, reflecting a year-on-year increase of 174.2% [2]. Retail Business - The retail segment's revenue was 139.84 billion RMB, down 9.5% year-on-year, with a notable decline in foot traffic in physical stores [2]. - The gross margin for the retail business improved to 34.0%, a year-on-year increase of 0.9 percentage points [2]. - The operating profit margin for the retail segment was 3.7%, up 0.4 percentage points year-on-year [2]. Future Projections - The company expects revenues of $8.441 billion, $8.834 billion, and $9.256 billion for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 7.0%, 4.7%, and 4.8% [2]. - Projected net profits for the same years are $448 million, $482 million, and $535 million, with growth rates of 63.0%, 7.6%, and 11.0% [2]. - The price-to-earnings ratio (P/E) is projected to be 8, 8, and 7 for the next three years, indicating a favorable valuation [2].

Financial Performance - For the nine months ended September 30, 2024, the company reported an unaudited consolidated profit attributable to shareholders of approximately $331.7 million[1]. - The company's revenue for the same period was $6,075.3 million, representing a 1.5% increase from $5,986.6 million in the previous year[7]. - The company achieved a pre-tax profit of $438.5 million, significantly up from $218.0 million in the previous year[2]. - The total comprehensive income for the period was $381.9 million, compared to $78.6 million in the previous year[3]. - The company reported a profit attributable to owners of $331.7 million, a 140.9% increase compared to $137.7 million in the previous year[14]. Revenue Breakdown - The footwear manufacturing revenue increased by 8.2% to $3,782.7 million, with shipment volume rising 16.2% to 186.9 million pairs[7]. - The total revenue from manufacturing operations, including footwear, soles, accessories, and others, was $4,135.5 million, up 9.0% year-on-year[8]. - Revenue from the retail subsidiary, Pou Sheng International (Holdings) Limited, decreased by 11.6% to $1,939.8 million, impacted by weak store traffic in mainland China[8]. - Total revenue for the period reached $6,075.3 million, a 1.5% increase from $5,986.6 million in the same period last year[9]. Cost and Efficiency - The company continues to focus on cost control measures to enhance operational efficiency and profitability[6]. - Total selling and distribution expenses decreased by 8.3% to $624.2 million, representing approximately 10.3% of total revenue[12]. - The average selling price of footwear decreased by 6.8% to $20.24 per pair due to changes in product mix and high base effects[7]. Profitability Metrics - Gross profit rose by 4.5% to $1,472.3 million, with an overall gross margin increase of 0.7 percentage points to 24.2%[10]. - The gross margin for the footwear segment improved to 34.0%, up 0.9 percentage points due to effective discount control and inventory management[11]. Strategic Focus - The company is committed to digital transformation strategies to improve sales conversion rates in its retail operations[6]. - The company anticipates stable demand for quality suppliers in the global footwear industry, despite uncertainties in the macroeconomic environment[15]. - The company plans to enhance operational resilience and production efficiency while managing costs and maintaining healthy cash flow[15]. - The long-term outlook for the sports industry remains optimistic, with a focus on diversifying manufacturing capacity in Indonesia and India[15]. - The company aims to integrate automation technology and R&D capabilities to strengthen its competitive edge in the industry[16].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15 HKD, indicating an expected relative return of over 20% within the next six months [1]. Core Insights - The company has reported better-than-expected earnings, with a projected net profit growth of 140-145% year-on-year for Q1-Q3 2024, amounting to approximately 330-340 million USD [1]. - The growth in net profit is attributed to the normalization of the global footwear market and a significant increase in demand for the company's shoe products from brand clients [1]. - The company is balancing demand with order scheduling and has implemented an orderly overtime plan to support net profit growth, alongside steady capacity increases throughout the year [1]. Summary by Sections Financial Performance - The company’s manufacturing revenue growth for the first nine months of 2024 shows a positive trend, with monthly growth rates of 13%, -12%, 0%, +3%, +8%, +3%, +22%, +21%, and +27% [1]. - The report indicates that after previous years of pandemic and inventory destocking, the leading footwear supply chain is regaining its growth momentum [1]. Market Position - Adidas has raised its full-year revenue guidance, which is expected to benefit the company as a key supplier in Adidas' footwear supply chain [1]. - The report expresses optimism regarding Adidas' recovery, suggesting that the improved guidance reinforces the operational cycle of major brands and restores growth momentum [1]. Earnings Forecast - Based on the performance in Q1-Q3 2024, the earnings forecast has been revised upwards, with expected revenues of 8.65 billion USD, 9.645 billion USD, and 10.935 billion USD for FY24-26 [1]. - The projected net profits for these years are 430 million USD, 480 million USD, and 530 million USD, respectively, which are higher than previous estimates [1]. - The expected EPS for FY24-26 is revised to 0.27 USD, 0.30 USD, and 0.33 USD per share, with corresponding PE ratios of 7X, 6X, and 6X [1].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15 HKD, indicating a positive outlook for the stock [1]. Core Insights - The company reported a revenue of 660 million USD in September 2024, representing a year-on-year increase of 9.7%, with cumulative revenue reaching 6.1 billion USD, up 1.5% year-on-year [1]. - The manufacturing segment showed significant growth, with monthly revenue increasing by 26.7% year-on-year and cumulative revenue up by 9% [1]. - The report highlights a strong operational signal from the monthly data, suggesting positive order performance and an optimistic view for Q4 2024, as the company recovers from previous pandemic impacts and inventory adjustments [1]. - Adidas has raised its full-year revenue guidance to 10% growth, which is expected to positively impact the company's order expectations as a key supplier [1]. - The company is projected to achieve revenues of 8.65 billion USD, 9.645 billion USD, and 10.935 billion USD for FY24-26, with net profits of 380 million USD, 420 million USD, and 460 million USD respectively [1]. Summary by Sections Revenue Performance - In September 2024, the company achieved a revenue of 660 million USD, a 9.7% increase year-on-year, while cumulative revenue for the first nine months of 2024 was 6.1 billion USD, reflecting a 1.5% increase [1]. - The manufacturing business saw a monthly revenue increase of 26.7% year-on-year and a cumulative increase of 9% [1]. Operational Outlook - The report indicates that the monthly data shows strong operational signals, with expectations for positive order performance and a favorable outlook for Q4 2024 [1]. - The company is expected to benefit from Adidas's raised revenue guidance, which is anticipated to enhance order expectations [1]. Financial Projections - The company is projected to generate revenues of 8.65 billion USD, 9.645 billion USD, and 10.935 billion USD for FY24-26, with corresponding net profits of 380 million USD, 420 million USD, and 460 million USD [1]. - Earnings per share (EPS) are expected to be 0.24 USD, 0.26 USD, and 0.29 USD for the respective years, with price-to-earnings (PE) ratios of 8X, 7X, and 6X [1].

港股公司报告 | 公司点评 | --- | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|-------------------- ...

Financial Performance - Total footwear shipments reached 120.7 million pairs, a 9.9% increase from 109.8 million pairs in the same period last year[6] - Revenue for the period was $4,015.4 million, a 3.4% decrease compared to $4,155.0 million in the previous year[6] - Gross profit was $975.1 million, with a gross margin of 24.3%, up from 23.5% in the prior year[6] - Operating profit increased significantly to $259.3 million, a 67.9% rise from $154.4 million in 2023[6] - Net profit attributable to shareholders was $184.4 million, more than double the $83.6 million reported in the previous year[6] - Basic earnings per share rose to 11.44 cents, up from 5.19 cents in 2023[6] - Revenue for the six months ended June 30, 2024, was $4,015.407 million, a decrease of 3.4% compared to $4,154.968 million in the same period in 2023[12] - Gross profit for the six months ended June 30, 2024, was $975.087 million, slightly down from $977.710 million in 2023[12] - Net profit attributable to the company's owners for the six months ended June 30, 2024, was $184.401 million, a significant increase from $83.601 million in 2023[12] - Basic earnings per share for the six months ended June 30, 2024, were 11.44 cents, up from 5.19 cents in 2023[12] - Total comprehensive income for the six months ended June 30, 2024, was $170.546 million, compared to $29.330 million in 2023[13] - Revenue for the period decreased by 3.4% to $4,015.4 million, while net profit attributable to shareholders increased by 120.6% to $184.4 million[57] - Manufacturing business net profit attributable to shareholders surged by 177.5% to $155.4 million[57] - Footwear shipment volume increased by 9.9% to 120.7 million pairs, with average selling price decreasing by 7.8% to $19.98 per pair[58] - Total operating revenue decreased by 3.4% to $4,015.4 million, with sports/outdoor footwear contributing 51.7% of revenue at $2,074.6 million[59] - The company's manufacturing business shipped 120.7 million pairs of shoes, a 9.9% increase YoY, with an average selling price of $19.98 per pair, down 7.8% YoY[61] - Gross profit for the manufacturing business increased by 12.1% to $502.6 million, with a gross margin improvement of 1.7 percentage points to 19.1%[62] - The company's attributable recurring profit surged by 123.8% to $178.9 million, driven by operational improvements and cost efficiencies[65] - Product development expenses decreased to $68.8 million, focusing on digital prototyping, process reengineering, and sustainable materials[66] - Net cash from operating activities decreased to $173.7 million, with free cash flow at $79.9 million, while cash and equivalents decreased by $223.9 million[67] - The company's bank balance and cash stood at $922.8 million as of June 30, 2024, compared to $1,142.1 million on December 31, 2023[68] - The company's net cash decreased to $65.8 million as of June 30, 2024, from $169.4 million on December 31, 2023[68] - The company's leverage ratio improved to 18.1% as of June 30, 2024, down from 20.7% on December 31, 2023[68] - The company's total capital expenditure reached $93.8 million in the first half of 2024, up from $84.5 million in the same period of 2023[70] - Manufacturing business capital expenditure was $67.4 million in the first half of 2024, compared to $59.9 million in the same period of 2023[70] - Retail business capital expenditure increased to $26.4 million in the first half of 2024, up from $24.6 million in the same period of 2023[70] - The company's share of profits from associates and joint ventures totaled $32.9 million in the first half of 2024, up from $29.1 million in the same period of 2023[74] - The company's current ratio improved to 2.2 as of June 30, 2024, compared to 1.9 on December 31, 2023[68] - The company declared an interim dividend of HKD 0.40 per share, doubling from HKD 0.20 in 2023[78] Assets and Liabilities - Non-current assets as of June 30, 2024, were $3,510.754 million, a slight decrease from $3,574.374 million as of December 31, 2023[14] - Current assets as of June 30, 2024, were $3,694.760 million, down from $3,783.858 million as of December 31, 2023[14] - Cash and cash equivalents as of June 30, 2024, were $699.313 million, a decrease from $923.217 million as of December 31, 2023[14] - Current liabilities decreased from $1,984,674 thousand to $1,657,874 thousand, a reduction of 16.5%[15] - Net current assets increased from $1,799,184 thousand to $2,036,886 thousand, a growth of 13.2%[15] - Total assets minus current liabilities rose from $5,373,558 thousand to $5,547,640 thousand, an increase of 3.2%[15] - Non-current liabilities grew from $663,530 thousand to $814,359 thousand, up 22.7%[15] - Bank borrowings under current liabilities decreased from $643,159 thousand to $357,391 thousand, a drop of 44.4%[15] - Contract liabilities increased from $45,021 thousand to $68,291 thousand, up 51.7%[15] - Equity attributable to the company's owners rose slightly from $4,240,268 thousand to $4,258,443 thousand, a 0.4% increase[15] - Non-controlling interests increased from $469,760 thousand to $474,838 thousand, up 1.1%[15] - Total equity grew marginally from $4,710,028 thousand to $4,733,281 thousand, a 0.5% increase[15] - Deferred tax liabilities increased from $54,604 thousand to $56,579 thousand, up 3.6%[15] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners as of January 1, 2024, was $4.710 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.529 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.642 billion[16] - The company's equity attributable to owners as of June 30, 2023, was $4.077 billion[16] - The company's equity attributable to owners as of January 1, 2023, was $4.189 billion[16] - The company's total comprehensive income for the period was $29.330 million, with a profit of $105.011 million[16] - The company's total comprehensive income for the period was $2.754 million, with a profit of $83.601 million[16] - The company's profit for the period was $184.401 million, with a total comprehensive income of $161.887 million[16] - The company's total comprehensive income for the period was $170.546 million, with a profit of $203.971 million[16] - The company's equity attributable to owners as of June 30, 2024, was $4.733 billion[16] - The company's equity attributable to owners

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company has shown significant profit growth in Q2 2024, with net profit increasing by 157.8% to $80 million, despite a slight revenue decline of 1.7% to $2.01 billion [4] - The manufacturing capacity utilization rate has improved to 92%, indicating operational efficiency and potential for continued profit growth in the second half of 2024 [4] - The retail segment has experienced a revenue decline of 10.5% to $4.58 billion, but effective cost control measures have led to a gross margin increase of 2 percentage points to 35.4% [5] - The expected dividend yield for 2024 is projected to reach 9.6%, reflecting a strong return for shareholders [5] - The company’s net profit forecasts for 2024-2026 are $367 million, $406 million, and $449 million respectively, with a price-to-earnings (PE) valuation of 10-12 times for 2024 [5] Summary by Sections Financial Performance - Q2 2024 revenue decreased by 1.7% to $2.01 billion, while gross margin slightly increased to 23.5% [4] - The net profit margin improved by 2.6 percentage points to 4.2% [4] - Manufacturing revenue increased by 4.7% to $1.38 billion, with a net profit margin of 5.1% [4] - Retail revenue decreased by 10.5% to $4.58 billion, with a net profit margin of 3.5% [5] Profitability and Forecasts - The company expects net profits of $367 million in 2024, with a growth rate of 34% year-over-year [6] - The gross margin is projected to improve to 25.19% in 2024, indicating better cost management [6] - The expected earnings per share (EPS) for 2024 is $0.23, with a projected dividend of 0.90 HKD [8] Valuation - The estimated fair value range for the stock is between 17.82 and 21.38 HKD per share based on a PE ratio of 10-12 times for 2024 [5] - The average PE ratio for comparable companies is around 20.04 for 2023 [7] Market Comparison - The company's stock has shown a relative performance of -8.8% over the past month compared to the Hang Seng Index [2] - The stock's price has fluctuated between 6.98 and 16.18 HKD over the past year [1]

港股公司报告 | 公司点评 7 月制造营收增长提速，股息具备吸引力 公司发布 2024 年中期业绩公告 24H1 公司收入 40.2 亿美元，同减 3.4%；归母净利 1.8 亿美元，同增 120.6%； 归母经常性净利 1.8 亿美元，同增 123.8%；毛利率 24.3%，同增 0.8pct； 归母净利率 4.6%，同增 2.6pct。中期股息 0.8 亿美元，平均 0.4 港元/股， 配息率达 45%。 24H1 员工总人数 27.7 万，同增 0.1%；其中制造业 25.6 万，同增 1.3%；零 售业 2.1 万，同减 12.7%。24H1 鞋履出货量 1.207 亿双，同增 9.9%，印尼 占比 53%，越南占比 31%，中国大陆占比 12%。 同时，公司公告 7 月数据，24 年 1-7 月公司收入 47 亿美金，同减 1.5%， 其中制造业务 7 月营收同增 22%，增速环比显著提升；或系基数效应及订 单增长所致；24 年 1-7 月制造业营收同增 5%； 零售业务 7 月营收同减 11%，24 年 1-7 月营收同减 9%。 制造业产能利用率 90%，鞋履平均售价降低 24H1 制造业收入2 ...

Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on projected earnings growth and valuation metrics [3]. Core Insights - The company reported a revenue of $4.015 billion for the first half of 2024, a year-on-year decrease of 3.4%, while the net profit attributable to shareholders increased by 120.6% to $184 million [1]. - The manufacturing segment showed resilience with a revenue increase of 2.4% to $2.634 billion, driven by strong demand for footwear and effective cost management [2]. - The retail segment faced challenges, with revenue declining by 12.7% to $1.381 billion, but improvements in gross margin and cost control strategies were noted [2]. Financial Performance Summary - **Revenue Forecast**: Expected revenues for 2024, 2025, and 2026 are projected at $8.262 billion, $8.720 billion, and $9.169 billion, representing year-on-year growth rates of 4.7%, 5.5%, and 5.2% respectively [3]. - **Net Profit Forecast**: Projected net profits for the same years are $375 million, $410 million, and $443 million, with growth rates of 36.6%, 9.2%, and 8.0% respectively [3]. - **Earnings Per Share (EPS)**: EPS is expected to increase from $0.17 in 2023 to $0.23 in 2024, $0.25 in 2025, and $0.27 in 2026 [3]. - **Valuation Metrics**: The price-to-earnings (P/E) ratio is projected to decrease from 10 in 2023 to 7 in 2024 and further to 6 in 2026, indicating an attractive valuation [3]. Manufacturing Business Overview - The manufacturing segment achieved a capacity utilization rate of 90% in the first half of 2024, with a gross margin of 19.1%, reflecting a year-on-year increase of 1.7 percentage points [2]. - The average selling price of footwear decreased by 7.8% to $19.98 per pair, but the volume of footwear shipped increased by 9.9% to 12.1 million pairs [2]. Retail Business Overview - The retail segment's revenue declined by 8.9% year-on-year, but gross margin improved to 34.2% in the first half of 2024 [2]. - The company is focusing on digital transformation and optimizing store networks to enhance operational efficiency [2].

Financial Performance - Revenue for the six months ended June 30, 2024, was $4,015,407 thousand, a decrease of 3.4% compared to $4,154,968 thousand in the same period of 2023[2] - Profit attributable to owners of the company for the six months ended June 30, 2024, was $184,401 thousand, representing an increase of 120.6% from $83,601 thousand in the same period of 2023[2] - Basic earnings per share for the six months ended June 30, 2024, was 11.44 cents, up 120.4% from 5.19 cents in the same period of 2023[2] - Total comprehensive income for the six months ended June 30, 2024, was $170,546 thousand, compared to $29,330 thousand in the same period of 2023[6] - The company reported a net profit of $5,514 thousand for the six months ended June 30, 2024, compared to $3,660 thousand in the same period of 2023[15] - The company reported a significant increase in non-recurring profit attributable to owners, which rose to $178,887 thousand from $79,941 thousand, marking a 123.8% increase[2] - The company's recurring profit attributable to owners increased by 123.8% to $178.9 million, compared to $79.9 million in the same period last year[38] Dividends - The interim dividend declared was HK$0.40 per share, a 100% increase from HK$0.20 per share in the previous year[2] - The company declared an interim dividend of HKD 0.40 per share for the six months ending June 30, 2024, compared to HKD 0.20 per share in the same period of 2023, amounting to approximately HKD 644,851,000[18] - The board declared an interim dividend of HK$0.40 per share, up from HK$0.20 per share in 2023[49] Assets and Liabilities - Non-current assets as of June 30, 2024, totaled $3,510,754 thousand, a decrease from $3,574,374 thousand as of December 31, 2023[7] - Current assets as of June 30, 2024, were $3,694,760 thousand, down from $3,783,858 thousand as of December 31, 2023[7] - Inventory as of June 30, 2024, was $1,256,245 thousand, an increase from $1,247,003 thousand as of December 31, 2023[7] - Cash and cash equivalents as of June 30, 2024, were $699,313 thousand, a decrease from $923,217 thousand as of December 31, 2023[7] - Net current assets increased to $2,036,886 thousand, compared to $1,799,184 thousand as of December 31, 2023, reflecting a growth of 13.23%[8] - Total assets less current liabilities rose to $5,547,640 thousand, an increase of 3.25% from $5,373,558 thousand[8] - The total equity attributable to owners of the company increased to $4,258,443 thousand from $4,240,268 thousand, reflecting a growth of 0.43%[8] - The company incurred a tax expense of $61,229 thousand for the current period, compared to $38,216 thousand in the previous year, representing an increase of 60.25%[16] Revenue Breakdown - Manufacturing business revenue increased to $2,634,404 thousand, up 2.98% from $2,573,895 thousand year-over-year[14] - Retail business revenue decreased to $1,381,003 thousand, down 12.66% from $1,581,073 thousand in the previous year[14] - Revenue from the footwear manufacturing segment increased by 2.4% to $2,634.4 million[30] - Retail revenue from the group's subsidiary, BaoSheng, decreased by 12.7% to $1,381.0 million, with a decline of 8.9% in RMB terms[31] Operational Metrics - The group shipped 120.7 million pairs of shoes, a 9.9% increase from 109.8 million pairs in the same period last year[34] - The average selling price per pair of shoes decreased by 7.8% to $19.98, down from $21.67[34] - Employee costs totaled $993,374 thousand, a decrease of 6.86% from $1,066,381 thousand in the previous year[17] - Total sales and distribution expenses decreased by 10.4% to $424.2 million, accounting for approximately 10.6% of operating revenue[37] Investments and Expenditures - The group's total capital expenditure reached $93.8 million, up from $84.5 million in the first half of 2023[43] - Capital expenditure for manufacturing operations was $67.4 million, compared to $59.9 million in the first half of 2023[43] - Capital expenditure for the retail business increased to $26.4 million, from $24.6 million in the first half of 2023, aligning with its refined retail strategy[44] - The group plans to invest approximately ₹23 billion (approximately $276 million) in a production base in an economic zone in India[45] Market Outlook and Strategy - Global footwear demand showed signs of recovery in the first half of 2024, with Vietnam's footwear exports increasing by 8.8% year-on-year to USD 10.7 billion[26] - The company maintained an optimistic outlook on its manufacturing business and will continue to focus on long-term capacity planning in Indonesia and India, targeting sustainable growth[53] - The group aims to enhance operational resilience and agility while maintaining healthy cash flow and financial stability[52] - The group plans to enhance its digital transformation strategy through lean management and smart automation investments, integrating manufacturing management systems into an operational platform (OCP) to improve efficiency[53] - The group aims to implement a refined retail strategy in response to the increasingly dynamic retail environment in mainland China, enhancing its physical and omnichannel retail presence[53] Corporate Governance and Compliance - The company has adopted and complied with the corporate governance code as per the listing rules, ensuring adherence to standards for securities trading by directors[55] - The external auditor has reviewed the interim financial data without reservation, confirming compliance with the relevant accounting standards[56] - The company will suspend shareholder registration from September 11 to September 13, 2024, for processing dividend eligibility[57]