Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative return of over 20% within the next six months [6][14]. Core Insights - The company's manufacturing business has shown resilience, with a revenue of $660 million in June 2025, reflecting a year-on-year increase of 1.5%. The manufacturing segment grew by 9.4%, while the retail segment is awaiting recovery [1]. - The U.S.-Vietnam trade agreement has been established, imposing a 20% tariff on goods exported from Vietnam to the U.S., which enhances the stability of export orders for the company, as the U.S. is its second-largest market [2]. - The company is focusing on diversifying its manufacturing capacity by investing in Indonesia and India, aiming to enhance operational agility and flexibility in response to global supply chain fluctuations [3]. - The retail subsidiary, Bao Sheng, is expanding its omnichannel retail strategy, enhancing product offerings and operational efficiency to improve profitability and shareholder returns [4]. - Revenue forecasts for 2025-2027 are projected at $8.4 billion, $8.9 billion, and $9.5 billion, with net profits of $400 million, $430 million, and $480 million respectively, indicating a stable growth trajectory [5]. Summary by Sections Revenue Performance - In the first half of 2025, the cumulative revenue reached $4.06 billion, with a year-on-year increase of 1.1%. The manufacturing segment contributed a 6.2% growth, while Bao Sheng's revenue declined by 8.3% [1]. Trade Agreements - The trade agreement between the U.S. and Vietnam is expected to provide more certainty regarding tariff burdens for apparel brands and manufacturers, benefiting the company's operations in Vietnam [2]. Manufacturing Strategy - The company is accelerating its long-term capacity layout strategy, focusing on regions with abundant labor supply and sustainable growth potential, while also enhancing digital transformation to improve operational performance [3]. Retail Strategy - Bao Sheng is committed to refining its retail strategy by dynamically managing inventory and expanding partnerships to strengthen profit margins [4]. Financial Projections - The report maintains its earnings forecasts, with expected earnings per share (EPS) of $0.25, $0.27, and $0.30 for 2025, 2026, and 2027 respectively, reflecting a stable outlook for the company's financial health [5].

Market Performance - Today, Hong Kong stocks showed significant movements with various companies experiencing notable gains, including Now Medical Technology (02225) which rose over 5% after a partnership with David Medical to develop "Minimally Invasive 5.0" technology [1] - Semiconductor stocks also saw an uptick, with Huahong Semiconductor (01347) increasing by 4.12%, and SMIC (01347) rising by 3.11% [1][2] - Hong Kong Travel (00308) surged over 14%, doubling its stock price in less than a month, driven by speculation in the tourism industry [1] - Meituan-W (03690) rose over 3% as it led an investment in Star Sea Map, furthering its focus on embodied intelligence [1] - The insurance sector saw broad gains, with China Pacific Insurance (02601) up 4.88% and China Life Insurance (02318) increasing by 3.19% [1] Company-Specific Developments - Alibaba-W (09988) increased over 3%, although its investment in instant retail and delivery services may impact profitability, according to HSBC [2] - Qian Shi International (00381) skyrocketed by over 55% due to a proposed digital economy collaboration involving a stablecoin mechanism [2] - Stablecoin-related stocks rose, with Guotai Junan International (01788) up 9.13% and China Everbright Holdings (00165) increasing by 4.83% [2] - Yadi Holdings (01585) gained over 4% following the announcement of a new electric vehicle replacement program [3] - WuXi AppTec (02359) opened nearly 5% higher after announcing expected revenue exceeding 20 billion yuan and a projected doubling of net profit [3] Industry Trends - The electric vehicle sector is expected to see growth due to a new replacement program, which could accelerate industry expansion [3] - The rare earth sector is also experiencing upward momentum, with Jinli Permanent Magnet (06680) rising over 5% after major players announced price increases [3] - The biotechnology sector is witnessing positive developments, with Xiansheng Pharmaceutical (02096) gaining over 3% after a collaboration with Conade Biopharmaceuticals [2][3]

Group 1 - The core viewpoint is that Nike's management expects a narrowing of revenue decline to a mid-single-digit percentage in Q1 of FY2026, following an 11% year-over-year decline in Q4 of FY2025 [1] - Nike's revenue for Q4 FY2025 decreased by 11% year-over-year, exceeding FactSet's expectation by 3.4%, with regional revenue declines in North America, EMEA, Greater China, and Asia-Pacific-Latin America [1][2] - Inventory levels remained high, with a year-over-year change of 0% in Q4 FY2025, and Nike plans to continue reducing inventory over the next two quarters [1] Group 2 - Management anticipates a year-over-year revenue decline of mid-single digits for Q1 FY2026, with gross margin expected to decrease by 350-425 basis points, including a 100 basis point negative impact from tariffs [2] - The increase in wholesale holiday orders is offset by declines in the Greater China region, with apparel and footwear categories showing year-over-year declines of 9% and 12%, respectively [2] - Macquarie believes that approximately $1 billion in incremental tariff costs will be alleviated through optimizing sourcing and production distribution, reducing the import share from China, and phased price increases starting in Fall 2025 [2] Group 3 - In the Greater China region, Nike's direct business revenue declined by 15% year-over-year, with digital and store sales down 31% and 6%, respectively [3] - The decline in wholesale revenue by 24% year-over-year is expected to relieve pressure on retailers like Tmall [3] - Efforts to revitalize the Chinese market will take time, with deeper resets leading to increased discounts and reduced supply, as evidenced by an 11% year-over-year decline in inventory [3] Group 4 - The report maintains an underperform rating for Yue Yuen Industrial Holdings and Kwan Hung Holdings, despite ongoing revenue challenges for Nike in China [4] - Tmall is rated outperform with a target price of HKD 3.70, as competition from domestic and emerging international brands may lead to more discounts [4] - Yue Yuen is rated underperform with a target price of HKD 9.60, facing slow recovery in brand client orders and adverse impacts from raw material costs and foreign exchange [4]

Core Viewpoint - Goldman Sachs economists predict that the RMB/USD exchange rate will reach 7.20, 7.10, and 7.00 in three, six, and twelve months respectively, indicating a potential appreciation of 3% over the next twelve months [1] Group 1: Companies Likely to Benefit from RMB Appreciation - The list of Hong Kong-listed companies that may benefit from RMB appreciation includes: GDS Holdings Limited (09698), Zijin Mining Group (02899), China Jinmao Holdings Group (00817), Dongyue Group (00189), China Southern Airlines (01055), Baidu Group (09888), China Feihe (06186), and Tencent Holdings (00700) [1] - Criteria for selection include: 1) Market capitalization over $2 billion and average daily trading volume (ADVT) exceeding $5 million 2) Industries reliant on USD imports, such as aviation, petrochemicals, construction, staple foods, and tourism, or having over 20% of debt in USD 3) Overseas revenue exposure below 30% 4) No foreign exchange gains during the RMB depreciation period in 2024 5) Low correlation of returns with exchange rate fluctuations [1] Group 2: Companies Likely to Underperform in RMB Appreciation - The list of Hong Kong-listed companies that may underperform during RMB appreciation includes: Haier Smart Home (06690), PetroChina Company Limited (00857), WuXi AppTec (03933), ASMPT Limited (00522), Yue Yuen Industrial Holdings (00551), Sinotruk (Hong Kong) Limited (03808), Shenzhou International Group Holdings Limited (02313), and Minth Group Limited (00425) [2] - Criteria for selection include: 1) Market capitalization over $2 billion and average daily trading volume exceeding $5 million 2) Overseas revenue exposure exceeding 30% 3) USD debt level below 5% 4) No foreign exchange losses during the RMB depreciation period in 2024 5) High correlation of returns with exchange rate fluctuations [2]

Group 1 - The overall micro liquidity shows a net outflow of 93 billion yuan, with margin financing turning into a net inflow of 182.44 billion yuan, indicating a recovery in investor sentiment [2][20][21] - The issuance of equity financing remains low, with a total of 40.69 billion yuan raised this period, reflecting a decrease from the previous period [20][22] - The net reduction in industrial capital has narrowed to 59.75 billion yuan, suggesting a shift in large shareholders' behavior [20][22] Group 2 - The commercial banking sector reported a net profit of 656.8 billion yuan in Q1 2025, a year-on-year decrease of 2.32%, with state-owned banks showing improved performance [4][36] - The total assets of commercial banks reached approximately 394 trillion yuan, growing by 7.20% year-on-year, indicating stable asset expansion [4] - The non-performing loan ratio stood at 1.51%, reflecting a slight increase but overall asset quality remains stable [4] Group 3 - The pharmaceutical company "药师帮" achieved a revenue of 17.904 billion yuan in 2024, with a net profit exceeding 30.01 million yuan, marking its first profitable year [5][24] - The platform business has expanded its SKU supply to over 3.9 million, while the number of registered downstream buyers has surpassed 827,000 [24][25] - The company forecasts revenues of 20.693 billion yuan, 24.215 billion yuan, and 28.689 billion yuan for 2025-2027, with net profits projected at 1.56 billion yuan, 3.73 billion yuan, and 6.02 billion yuan respectively [26] Group 4 - "伟测科技" reported a revenue of 1.077 billion yuan in 2024, with a year-on-year growth of 46%, and a net profit of 128 million yuan, reflecting a strong recovery in the semiconductor testing industry [31][32] - The company plans to enhance its testing capacity through the construction of new facilities, aiming to significantly increase its service capabilities [33] - The revenue from wafer testing reached 615 million yuan, growing by 38.91%, while finished chip testing revenue was 367 million yuan, up by 50.07% [33] Group 5 - "华明装备" achieved a total revenue of 2.322 billion yuan in 2024, with a year-on-year increase of 18.41%, and a net profit of 614 million yuan, up by 13.25% [9] - The company has expanded its overseas market presence, with new facilities in Indonesia and Singapore, enhancing its service capabilities in Southeast Asia [9] - The successful operation of its high-voltage products marks a significant milestone in achieving domestic production capabilities [9] Group 6 - Alibaba's revenue for FY25Q4 reached 236.5 billion yuan, with adjusted EBITDA of 41.8 billion yuan, indicating strong performance across its business segments [16][27] - The cloud business generated 30.1 billion yuan in revenue, driven by rapid growth in public cloud services and AI-related products [28][29] - The company expects revenues of 1,035.3 billion yuan, 1,105.7 billion yuan, and 1,179.8 billion yuan for FY2026-2028, with net profits projected at 180.7 billion yuan, 185.9 billion yuan, and 195.7 billion yuan respectively [30]

Investment Rating - The report maintains a "Buy" rating for the company with a target price yet to be specified [5][4] Core Views - The company reported a 1% year-on-year increase in revenue for Q1 2025, reaching $2 billion, while gross margin decreased by 2.2 percentage points to 23%. Net profit attributable to shareholders fell by 24% to $80 million [1] - Manufacturing revenue grew by 6% year-on-year, but gross margin declined to 18%, a drop of 2.6 percentage points, with net profit down 25% year-on-year. Retail revenue decreased by 5%, with a gross margin of 33% and a 21% decline in net profit [1] - The overall revenue for April 2025 showed a 1% year-on-year increase, with manufacturing revenue up 11% and retail business still in recovery [1] Summary by Sections Manufacturing (Q1 2025) - Revenue from the U.S. increased by 14%, accounting for 29% of total revenue, while Europe saw an 11% increase, making up 27%. However, revenue from mainland China dropped by 19%, representing 15% of total revenue [2] - The total shipment volume of footwear rose by 5% to 62 million pairs, with an average selling price (ASP) increase of 3% to $20, benefiting from a better order mix [2] - Major production regions include Indonesia (55% of total shipments), Vietnam (31%), and mainland China (10%), with Indonesia and Vietnam showing shipment increases of 4% and 13% respectively, while mainland China experienced an 8% decline [2] Retail (Q1 2025) - The company operated 3,437 direct stores, a decrease of 1% year-on-year [3] - Inventory turnover days increased by 19 days to 138 days [3] Financial Forecast - The company forecasts revenues of $8.4 billion, $8.9 billion, and $9.5 billion for the years 2025 to 2027, with net profits of $400 million, $430 million, and $480 million respectively. Corresponding EPS is projected to be $0.25, $0.27, and $0.30, with PE ratios of 6x, 6x, and 5x [4]

Investment Rating - The investment rating for the company is "Buy" [6] Core Insights - The company reported a Q1 2025 revenue of $2.03 billion, a year-on-year increase of 1.3%, with a net profit of $75.76 million, down 24.2% year-on-year. The manufacturing segment generated $1.33 billion in revenue, up 5.9% year-on-year, while the retail segment saw revenue of $700 million, down 6.5% year-on-year [1][2][4] Summary by Sections Manufacturing Business - The manufacturing segment's revenue reached $1.33 billion in Q1 2025, with a shipment volume of 61.9 million pairs, reflecting a 5.3% increase year-on-year. The average selling price (ASP) was $20.00, down 2.5% year-on-year. Revenue in April 2025 increased by 10.5% year-on-year, supported by strong orders from key clients like Adidas and Asics [2][3] - The capacity utilization rate was 91% in Q1 2025, up 3 percentage points year-on-year. However, uneven capacity loading and rising labor costs pressured profit margins, leading to a gross margin of 17.7%, down 2.6 percentage points year-on-year [3] Retail Business - The retail segment reported revenue of $700 million in Q1 2025, a decrease of 6.5% year-on-year. The number of offline stores decreased to 3,437, with same-store sales down 13.9% due to weak foot traffic and store closures. Conversely, online retail revenue grew by 20% year-on-year, with live-streaming sales surging by 230% [4] - The gross margin for the retail segment was 32.7%, down 0.5 percentage points year-on-year, while the net profit margin was 2.7%, down 0.5 percentage points [4] Earnings Forecast and Valuation - The company is expected to achieve revenues of $8.5 billion, $9.0 billion, and $9.6 billion for the years 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 3%, 6%, and 7%. The net profit is projected to be $410 million, $460 million, and $520 million for the same years, with corresponding growth rates of 5%, 13%, and 12% [5][11]

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company reported a Q1 2025 revenue of $2.03 billion, a year-on-year increase of 1.3%, with a net profit of $75.76 million, down 24.2% year-on-year. The manufacturing segment generated $1.33 billion in revenue, up 5.9% year-on-year, while the retail segment saw revenue of $700 million, down 6.5% year-on-year [1][2][4] Summary by Sections Manufacturing Business - The manufacturing segment's revenue reached $1.33 billion in Q1 2025, with a shipment volume of 61.9 million pairs, reflecting a 5.3% year-on-year increase. The average selling price (ASP) was $20.00, down 2.5% year-on-year. Revenue in April 2025 increased by 10.5% year-on-year, supported by strong orders from key clients like Adidas and Asics [2][3] - The capacity utilization rate was 91% in Q1 2025, up 3 percentage points year-on-year. However, uneven capacity loading and rising labor costs pressured profit margins, leading to a gross margin of 17.7%, down 2.6 percentage points year-on-year [3] Retail Business - The retail segment generated $700 million in revenue, down 6.5% year-on-year, primarily due to weak consumer demand in China and a decline in foot traffic. Online retail revenue, however, grew by 20% year-on-year, with live-streaming sales increasing by 230% [4] - The gross margin for the retail segment was 32.7%, down 0.5 percentage points year-on-year, while the net profit margin was 2.7%, down 0.5 percentage points [4] Earnings Forecast and Valuation - The company expects to achieve revenues of $8.5 billion, $9.0 billion, and $9.6 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 3%, 6%, and 7%. The net profit is projected to be $410 million, $460 million, and $520 million for the same years, corresponding to growth rates of 5%, 13%, and 12% [5][11]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported Q1 2025 revenue and net profit attributable to shareholders of $202.9 million and $7.6 million, respectively, showing a year-on-year growth of 1.3% and a decline of 24.2%, which was below market expectations [2] - The decline in net profit was primarily due to uneven capacity utilization across manufacturing plants, inefficiencies in production, and rising labor costs due to increased hiring and wage inflation [2] - The manufacturing ASP (Average Selling Price) turned positive after five consecutive quarters of decline, driven by a favorable order mix [3] - The retail business saw a further decline in revenue in April 2025, with a year-on-year decrease of 7.7% [4] - The company is positioned as a global leader in athletic shoe manufacturing, benefiting from a strong market share among top sports brands and a vertically integrated supply chain [5] Summary by Sections Financial Performance - Q1 2025 manufacturing revenue and net profit were $132.8 million and $6.4 million, respectively, with year-on-year changes of +5.9% and -24.6% [3] - The gross margin for Q1 2025 was 17.7%, a decrease of 2.6 percentage points year-on-year, attributed to uneven capacity utilization and rising labor costs [3] - The company forecasts revenue for 2025-2027 to be $8.69 billion, $9.09 billion, and $9.43 billion, respectively, with a downward adjustment in net profit estimates to $460 million, $520 million, and $560 million [5][7] Retail Business - The retail segment reported Q1 2025 revenue and net profit of $51.07 million and $1.38 million, respectively, reflecting a year-on-year decline of 5.4% and 20.7% [4] - The number of direct-operated stores decreased by 1.3% year-on-year to 3,437, with 11 stores closed compared to the end of 2024 [4] Investment Outlook - Short-term challenges include potential impacts from tariffs and inflation on consumer confidence, particularly affecting Q3 orders [5] - The company is expected to maintain low to mid-single-digit growth in orders for the year, supported by capacity expansion and positive price growth [5] - Long-term, the company has room for improvement in net profit margins compared to peers [5]

Group Financial Performance - Yue Yuen Group's revenue increased by 1.3% YoY to $2,029.5 million in 1Q25 [12, 48] - Profit attributable to owners decreased by 24.2% YoY to $75.8 million [37, 48] - Gross profit margin decreased by 2.2 percentage points to 22.9% [37, 48] Manufacturing Business - Manufacturing revenue increased by 5.9% YoY to $1,328.3 million in 1Q25 [37, 42, 61] - Shoe volume increased by 5.3% YoY to 61.9 million pairs [36, 44] - Average selling price (ASP) increased by 2.5% YoY to $20.04 per pair [36] - Manufacturing gross profit margin decreased by 2.6 percentage points to 17.7% [36, 37, 61] - Capital expenditure increased significantly by 239.2% YoY to $67.5 million [49, 83] Retail Business - Pou Sheng - Pou Sheng's revenue decreased by 5.4% YoY in RMB terms [37, 41] - Pou Sheng's online contribution reached a historical high, accounting for 32% of total sales, up 20% YoY [40, 93] - Profit attributable to owners of Pou Sheng decreased by 20.7% YoY [37, 94] - Same Store Sales Growth increased 13.9% YoY [93]