Core Viewpoint - Xinxing Group (01170.HK) reported an increase in orders for the first quarter ending March 31, 2026, primarily due to brand clients accelerating shipments during a 90-day tariff grace period, with growth driven by the more competitive cost structure of its Cambodia factory [1] Group Performance - The company estimates a revenue increase of approximately 7.9% for the first quarter of the 2026 fiscal year compared to the same period last year [1] Strategic Response - In light of the short-term uncertainties related to tariffs, the company remains vigilant, prioritizing financial health and business resilience [1] - The company is actively engaging with brand clients regarding product development and procurement plans [1] Operational Preparedness - The company possesses a robust production platform, ready to respond to potential new orders, and is actively strengthening its preparedness for market recovery [1] Long-term Outlook - The company maintains a positive outlook for long-term growth and development [1]

Core Viewpoint - The company, Xinxing Group, reported an increase in orders for the first quarter ending March 31, 2026, primarily due to brand clients accelerating shipments during a 90-day tariff grace period, with growth driven by a more competitive cost structure in its Cambodia facilities [1] Group 1: Financial Performance - The company estimates a revenue increase of approximately 7.9% for the first quarter of the 2026 fiscal year compared to the same period last year, based on unaudited management accounts [1] Group 2: Strategic Outlook - The company remains vigilant in the face of short-term uncertainties related to tariffs, prioritizing financial health and business resilience [1] - The company is actively engaging with brand clients regarding product development and procurement plans, indicating a proactive approach to market demands [1] - The company has a robust production platform ready to respond to potential new orders and is preparing for market recovery, maintaining a positive outlook for long-term growth and development [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（「聯交所」對本公告之內容 概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就本公告全部 或任何部份內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） （股份代號：01170） 內幕消息 業務更新 本公告乃信星鞋業集團有限公司（「本公司」，連同其附屬公司統稱「本集團」）根據聯 交所證券上市規則（「上市規則」）第13.09(2)條及證券及期貨條例（香港法例第571章） 第XIVA部項下之內幕消息條文（定義見上市規則）作出。 在關稅相關的短期不確定環境下，本集團時刻保持警覺，並以財務健康和業務韌性 為優先考量。本集團正積極與品牌客戶就產品開發和採購計劃進行討論。本集團擁 有精良的生產平台，已備妥對潛在新訂單的應對能力，並積極鞏固對市場復甦的準 備。前瞻未來，本集團對長期增長和發展保持正面展望。 董事會將在適當時候向本公司股東及潛在投資者提供最新資料。 本公告所載資料僅為董事會依據管理賬目及現時可得資料的初步評估，可予敲定及 調整且並未經本公司核數師審核或審閱。本集團於二零二六財政年度上半年的財務 業績詳情將在截至二零 ...

Group 1 - DJE Investment S.A. reduced its stake in 信星集团 (Xinxing Group) by 268,000 shares at a price of HKD 0.55 per share, totaling HKD 147,400 [1] - After the reduction, DJE Investment S.A. holds 40,128,000 shares, representing a 5.97% ownership stake [1] - The transaction involved other related parties: DJE Kapital AG and Ehrhardt Dr. Jens Alfred Karl [1]

Group 1 - DJE Investment S.A. reduced its stake in 信星集团 (Xinxing Group) by 268,000 shares at a price of HKD 0.55 per share, totaling HKD 147,400 [1] - After the reduction, DJE Investment S.A. holds 40.128 million shares, representing a 5.97% ownership in the company [1] - The transaction involves other related parties, including DJE Kapital AG and Ehrhardt Dr. Jens Alfred Karl [1]

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7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: 信星鞋業集團有限公司（於百慕達註冊成立之有限公司） II. 已發行股份及/或庫存股份變動 | 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) | 01170 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 671,607,445 | | 0 | | 671,607,445 | | 增加 / 減少 (-) | | | 0 | | 0 | | | | 本月底結存 | | | 671,607,445 | | 0 | | 671,607,445 | 第 2 頁 共 11 頁 v 1.1.1 呈交日期: 2025年8月1日 I. 法定/註冊股本變 ...

[Financial Highlights](index=4&type=section&id=Financial%20Highlights) In FY2025, the company's performance significantly declined, with total revenue decreasing by 9.2% to HK$626 million, turning a profit of HK$20.22 million into a loss of HK$33.89 million, and gross margin shifting from 4.2% to -1.8% [Financial Highlights Summary](index=4&type=section&id=Financial%20Highlights_Summary) In FY2025, the company's performance significantly declined, with total revenue decreasing by 9.2% to HK$626 million, turning a profit of HK$20.22 million into a loss of HK$33.89 million, and gross margin shifting from 4.2% to -1.8% Key Financial Indicators for FY2025 | Indicator | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | HKD 625.9 million | HKD 689.3 million | -9.2% | | **Gross Profit/(Loss)** | (HKD 11.38 million) | HKD 29.11 million | N/A | | **Gross Profit/(Loss) Margin** | (1.8)% | 4.2% | -6.0 percentage points | | **Profit/(Loss) Attributable to Equity Holders** | (HKD 33.89 million) | HKD 20.22 million | N/A | | **Basic Earnings/(Loss) Per Share** | (5.05) HK cents | 3.00 HK cents | N/A | | **Total Dividends Per Share for the Year** | 4.0 HK cents | 9.0 HK cents | -55.6% | - As of the end of FY2025, the company held cash and cash equivalents of approximately **HK$353 million**[11](index=11&type=chunk) - In terms of geographical distribution, Europe's revenue contribution increased from 26.4% to **35.2%** in FY2025, becoming the largest market, while the US market share decreased from 26.5% to **24.4%**[21](index=21&type=chunk)[25](index=25&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman%27s%20Statement) The Chairman's Statement addresses global economic uncertainties, strategic responses, and future outlook, emphasizing resilience and sustainable growth [Macroeconomic Discussion and Outlook](index=8&type=section&id=Chairman%27s%20Statement_Macroeconomic_Discussion) The global economic outlook remains highly uncertain due to US tariff policies, geopolitical risks, and low market sentiment, leading to volatile retail stocking and increased costs - Global economic visibility has decreased from low to extremely limited, with US tariff policies and geopolitical uncertainties creating significant variables for retail and manufacturing industries[34](index=34&type=chunk) - Brand customers are increasingly adopting short lead-time, small-batch order patterns, which will reduce manufacturing efficiency and increase production costs[36](index=36&type=chunk) - In the short term, the 90-day tariff reprieve stimulated inventory replenishment by retailers, leading to order growth for the group in Q1 FY2026, primarily from the more cost-competitive Cambodian factory[37](index=37&type=chunk)[38](index=38&type=chunk) [Strategies and Prospects](index=8&type=section&id=Chairman%27s%20Statement_Strategies) The group focuses on six key strategies including customer development, capacity optimization, operational excellence, cost control, talent development, and financial stability with ESG integration - The company will prioritize six strategic action plans to adapt to the rapidly changing operating environment[45](index=45&type=chunk) - Expertise in high-value athletic and fashion footwear is central to the company's value growth strategy, with continuous investment in labor skills and production equipment upgrades[43](index=43&type=chunk) - There are no immediate plans for factory expansion; instead, the focus will be on optimizing the utilization of existing facilities in Vietnam and Cambodia to enhance economies of scale[47](index=47&type=chunk)[48](index=48&type=chunk) - Cost inflation pressure will be mitigated through lean manufacturing, automation processes, and stringent cost control to maintain competitive advantage amidst market adversity[53](index=53&type=chunk) - Financial strength is the foundation of business resilience, with continued strict control over cash flow and capital expenditure, while integrating sustainability (ESG) as a core pillar of operations[61](index=61&type=chunk)[62](index=62&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the group's financial performance, operational highlights, and financial position for the fiscal year [Financial Results](index=15&type=section&id=Management%20Discussion%20and%20Analysis_Financial_Results) The group faced significant challenges this fiscal year, with revenue declining 9.2% to HK$626 million and a net loss of HK$34 million, primarily due to reduced sales volume, lower average selling prices, and increased labor costs Financial Results Summary | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | **Turnover** | HKD 626 million | HKD 689 million | | **Gross Loss/Profit** | (HKD 11 million) | HKD 29 million | | **Net Loss/Profit** | (HKD 34 million) | HKD 20 million | | **Basic Loss/Earnings Per Share** | (5.05) HK cents | 3.00 HK cents | - Performance decline was primarily attributed to: - Reduced economies of scale due to lower revenue - Increased labor wages, with direct labor costs rising from **19.3% to 27.1%** of revenue[93](index=93&type=chunk) - Lower average selling prices due to sluggish retail market conditions[94](index=94&type=chunk) - Expanded fair value loss from investment property revaluation to approximately **HK$16 million**[93](index=93&type=chunk) Key Financial Ratios | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | **Inventory Turnover Days** | 95 days | 109 days | | **Net Cash on Hand** | HKD 353 million | HKD 416 million | | **Gearing Ratio** | 0% | 0% | | **Current Ratio** | 2.7 | 3.2 | | **Quick Ratio** | 2.3 | 2.8 | [Operational Review](index=18&type=section&id=Management%20Discussion%20and%20Analysis_Operational_Review) The group navigated a challenging year with weak demand and rising costs, maintaining skilled labor, expanding customer base, and optimizing manufacturing operations while benefiting from stable investment property income - To address macroeconomic challenges, the group maintained stability in its skilled labor force while actively developing new customers, adding **three new European fashion and athletic brands** this year[103](index=103&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) [Manufacturing Operations](index=19&type=section&id=Management%20Discussion%20and%20Analysis_Operational_Review_Manufacturing) The group operates 21 production lines in Vietnam and Cambodia with an annual capacity of approximately 7 million pairs of shoes, utilizing 55.7% of capacity this year, while diversifying market presence with Europe becoming the largest market Production and Market Distribution | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | **Number of Production Lines** | 21 lines | - | | **Annual Production Capacity** | Approx. 7 million pairs | - | | **Capacity Utilization Rate** | 55.7% | 57.5% | | **US Market Revenue Share** | 24.4% | 26.5% | | **Europe Market Revenue Share** | 35.2% | 26.4% | | **Other Markets Revenue Share** | 40.4% | 47.1% | Product Category Revenue Contribution | Product Category | FY2025 Share | FY2024 Share | | :--- | :--- | :--- | | **Casual Footwear** | 75.9% | 78.6% | | **Premium Casual Footwear** | 16.8% | 15.2% | | **Infant and Toddler Footwear** | 7.3% | 6.2% | [Investments in Associates](index=21&type=section&id=Management%20Discussion%20and%20Analysis_Operational_Review_Associates) The 40%-owned associate in Vietnam, producing footwear for leading brands, saw increased turnover to HK$1.339 billion but a slight decrease in profit contribution due to higher R&D and trial production costs Associate Performance Contribution | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | **Associate Turnover** | Approx. HKD 1.339 billion | Approx. HKD 1.024 billion | | **Group's Share of Profit** | Approx. HKD 23 million | Approx. HKD 24 million | - The associate anticipates strong orders and plans to expand capacity in phases over the next two to three years, with capital expenditures primarily funded by internal resources[131](index=131&type=chunk) [Investment Properties](index=22&type=section&id=Management%20Discussion%20and%20Analysis_Operational_Review_Investment_Properties) The investment property portfolio generated stable rental income of approximately HK$26 million this year, slightly down from the previous year, with successful leasing of the Zhuhai plant - This year, the investment property portfolio generated total rental income of approximately **HK$26 million**, a decrease from HK$28 million in FY2024[135](index=135&type=chunk) [Financial Review](index=23&type=section&id=Management%20Discussion%20and%20Analysis_Financial_Review) The group maintains a robust financial position with HK$353 million in cash and no interest-bearing bank borrowings, supported by strong liquidity ratios and share repurchases to enhance shareholder value Liquidity and Financial Resources | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Cash and Cash Equivalents** | Approx. HKD 353 million | Approx. HKD 416 million | | **Interest-Bearing Bank Borrowings** | None | None | | **Gearing Ratio** | 0% | 0% | | **Current Ratio** | 2.7 | 3.2 | Share Repurchase Details | Period | Shares Repurchased | Total Consideration (Excl. Transaction Costs) | | :--- | :--- | :--- | | April 2024 | 3,222,000 | HKD 2.655 million | | January 2025 | 204,000 | HKD 0.129 million | | February 2025 | 4,036,000 | HKD 3.173 million | | March 2025 | 1,462,000 | HKD 1.208 million | | **Total** | **8,924,000** | **HKD 7.165 million** | - As of March 31, 2025, the group had approximately **6,400 employees**, with remuneration policies based on market levels and individual performance, complemented by share option and share award schemes[160](index=160&type=chunk) [Environmental, Social and Governance Report](index=26&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the group's commitment to sustainability, outlining its governance structure, social performance, and environmental initiatives [ESG Governance and Strategy](index=29&type=section&id=ESG_Governance_and_Strategy) The group has established a multi-tiered ESG governance structure, from the Board to working groups, and identified 16 key ESG issues through materiality assessment to guide its sustainability strategy - The group has established a top-down ESG governance structure, with the Board bearing ultimate responsibility, supported by a Sustainability Committee and working groups, ensuring ESG factors are integrated into strategic decisions[175](index=175&type=chunk)[178](index=178&type=chunk)[181](index=181&type=chunk) - Through materiality assessment, the group identified **16 key ESG issues**, with "Energy Consumption," "Packaging Materials," "Health and Safety," and "Development and Training" deemed the most significant to stakeholders and the company[194](index=194&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Social Performance](index=35&type=section&id=ESG_Social_Performance) The group employs 6,050 staff across Vietnam and Cambodia, adheres to labor laws, provides training, manages 304 suppliers, and contributes to the community, while reporting 18 work-related injuries this year Workforce Statistics (As of March 31, 2025) | Category | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | **Total Employees** | 6,050 | 6,100 | | **Female Employee Ratio** | 78.1% | 80.3% | | **Vietnam Employee Ratio** | 51.4% | 49.2% | | **Cambodia Employee Ratio** | 48.6% | 50.8% | | **Total Employee Turnover Rate** | 13% | 13% | Health and Safety Data | Indicator | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | **Number of Work Injuries** | 18 | 19 | | **Lost Workdays** | 163 | 54 | Employee Training Data (2024/25 Period) | Category | Percentage of Employees Trained | Average Training Hours Per Employee | | :--- | :--- | :--- | | **Total** | 53.6% | 24.3 hours | | **Male** | 24.5% | 13.4 hours | | **Female** | 75.5% | 12.9 hours | - This year, the group donated **HK$162,000** to the community to fulfill its social responsibilities[283](index=283&type=chunk)[287](index=287&type=chunk) [Environmental Performance](index=52&type=section&id=ESG_Environmental_Performance) The group's total GHG emissions increased to 7,899.6 tonnes CO2e, energy consumption rose by 24%, and water usage by 12%, but hazardous and non-hazardous waste generation significantly decreased by 39.6% and 24.1% respectively Greenhouse Gas Emissions (tonnes of CO2e) | Scope | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | **Scope 1 (Direct)** | 166.8 | 153.4 | | **Scope 2 (Indirect - Electricity)** | 7,293.3 | 6,584.0 | | **Scope 3 (Other Indirect)** | 439.5 | 24.5 | | **Total Emissions** | 7,899.6 | 6,761.9 | Resource Consumption and Waste Generation | Indicator | Unit | 2024/25 Period | 2023/24 Period | Change | | :--- | :--- | :--- | :--- | :--- | | **Total Energy Consumption** | kWh | 14,781,110.6 | 11,965,023.7 | +23.5% | | **Total Water Consumption** | Cubic Meters | 338,166.0 | 301,431.0 | +12.2% | | **Hazardous Waste** | kg | 57,683.5 | 95,536.5 | -39.6% | | **Non-Hazardous Waste** | kg | 540,447.9 | 712,170.4 | -24.1% | - The group identified physical risks from climate change (e.g., extreme weather leading to supply chain disruptions) and transition risks (e.g., increased costs due to climate regulation changes), and has developed corresponding response strategies[364](index=364&type=chunk)[366](index=366&type=chunk)[368](index=368&type=chunk) [Corporate Governance Report](index=101&type=section&id=Corporate%20Governance%20Report) This report details the company's adherence to high corporate governance standards, including board structure, committee functions, and risk management practices [Corporate Governance Practices](index=102&type=section&id=Corporate_Governance_Practices) The company maintained high corporate governance standards, fully complying with the HKEx Listing Rules' Corporate Governance Code throughout the review period, with the Audit Committee overseeing governance responsibilities - The company applied and complied with all code provisions of the Corporate Governance Code throughout the entire review period[426](index=426&type=chunk) - The company has adopted a code of conduct for directors' securities transactions that does not deviate from the Model Code, and all directors have confirmed compliance upon inquiry[427](index=427&type=chunk) [Board of Directors](index=104&type=section&id=Board_of_Directors) The Board comprises 9 members, including 3 executive, 3 non-executive, and 3 independent non-executive directors, ensuring clear responsibilities, independent oversight, and continuous professional development - The Board consists of **9 members**, including **3 executive directors**, **3 non-executive directors**, and **3 independent non-executive directors**, meeting the Listing Rules' requirements for the number of independent non-executive directors[430](index=430&type=chunk)[432](index=432&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk) - The roles of Chairman (Ms. Wong Sau Ngan) and Chief Executive Officer (Mr. Chan Yik Mo) are separate, with clearly defined responsibilities, in compliance with Corporate Governance Code provision C.2.1[434](index=434&type=chunk) - All directors participate in continuous professional development, and newly appointed independent non-executive director Mr. Lo Ka Kin has received legal training on the responsibilities of listed company directors[452](index=452&type=chunk)[454](index=454&type=chunk) [Board Committees](index=110&type=section&id=Board_Committees) The company has established Remuneration, Nomination, and Audit Committees to assist the Board in overseeing executive compensation, board composition and diversity, and financial reporting and internal controls, respectively - The Remuneration Committee comprises **1 executive director** and **3 independent non-executive directors**, responsible for reviewing and approving remuneration packages for directors and senior management, including share options and share awards[467](index=467&type=chunk)[468](index=468&type=chunk)[472](index=472&type=chunk) - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition, and has adopted a Board Diversity Policy and Nomination Policy to ensure a balanced mix of skills and experience on the Board[478](index=478&type=chunk)[479](index=479&type=chunk)[486](index=486&type=chunk) - The Audit Committee consists of **1 non-executive director** and **3 independent non-executive directors**, responsible for reviewing financial statements, internal control systems, and fulfilling corporate governance duties[499](index=499&type=chunk)[500](index=500&type=chunk)[503](index=503&type=chunk) [Risk Management and Internal Controls](index=118&type=section&id=Risk_Management_and_Internal_Controls) The Board is responsible for maintaining robust risk management and internal control systems, reviewed annually, employing a 'three lines of defense' framework to address key risks like global economic uncertainty and rising operational costs - The group adopts a "three lines of defense" corporate governance structure, including daily monitoring by operational management, risk oversight by the finance and compliance team, and independent internal audit by external professional institutions[532](index=532&type=chunk) Key Risk Identification | Risk Area | Primary Risks | | :--- | :--- | | **Strategic Risk** | Increasingly uncertain global economic outlook | | **Operational Risk** | Increased operational cost pressure | | **Financial Risk** | No significant risks identified | | **Compliance Risk** | No significant risks identified | - The Board, through the Audit Committee, conducted an annual review of the risk management and internal control systems and deemed them effective and adequate for FY2025[518](index=518&type=chunk)[539](index=539&type=chunk) [Report of the Directors](index=143&type=section&id=Report%20of%20the%20Directors) This report provides an overview of the group's business activities, financial position, and corporate affairs for the fiscal year, including share repurchases and significant customer concentration [Business Overview and Financial Review](index=144&type=section&id=Directors_Report_Overview) The report details the group's footwear manufacturing and property investment activities, noting a loss for the year, a proposed special final dividend, share repurchases, and high customer concentration with 91.8% of sales from the top five clients - The Board recommends a special final dividend of **2.0 HK cents per share**, bringing the total annual dividend to **4.0 HK cents per share** when combined with the interim dividend already paid[617](index=617&type=chunk) - During the year, sales to the **top five customers accounted for 91.8%** of total sales, with the largest customer contributing as much as **71.5%**, indicating significant customer concentration risk[642](index=642&type=chunk) Annual Share Repurchase Summary | Period | Shares Repurchased | Total Consideration (HKD thousand) | | :--- | :--- | :--- | | April 2024 | 3,222,000 | 2,655 | | January 2025 | 204,000 | 129 | | February 2025 | 4,036,000 | 3,173 | | March 2025 | 1,462,000 | 1,208 | | **Total** | **8,924,000** | **7,165** | [Directors' and Chief Executives' Interests in Shares](index=152&type=section&id=Directors%27%20and%20Chief%20Executives%27%20Interests%20in%20Shares) As of March 31, 2025, the Chairman, Ms. Wong Sau Ngan, held 39.37% of the company's shares, with King Strike Limited as a major shareholder, and all disclosures comply with SFO requirements - The Chairman of the Board, Ms. Wong Sau Ngan, held a total of **264,460,041 shares**, representing **39.37%** of the issued shares, through personal holdings and controlled corporations, including King Strike Limited[667](index=667&type=chunk)[669](index=669&type=chunk) - King Strike Limited, as a substantial shareholder, held **263,960,041 shares**, representing **39.29%** of the company's issued share capital[687](index=687&type=chunk) - Other than the disclosed information, no other interests or short positions in shares, underlying shares, or debentures were required to be recorded by the company's directors and substantial shareholders under the Securities and Futures Ordinance[673](index=673&type=chunk)[689](index=689&type=chunk) [Audited Financial Statements](index=157&type=section&id=Audited%20Financial%20Statements) This section presents the group's audited financial statements, including the independent auditor's report, consolidated statements, and detailed notes, providing a comprehensive view of financial performance and position [Independent Auditor's Report](index=157&type=section&id=Independent_Auditor's_Report) Ernst & Young issued an unmodified opinion on the consolidated financial statements for the year ended March 31, 2025, highlighting key audit matters such as investment property fair value, tax provisions, and non-financial asset impairment assessments - The auditor believes that the consolidated financial statements truly and fairly reflect the group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, and have been properly prepared[698](index=698&type=chunk) - Key audit matters include: - **Estimation of fair value of investment properties**: Involves judgments highly dependent on estimates and assumptions regarding rental values and market yields[701](index=701&type=chunk)[706](index=706&type=chunk) - **Taxation**: The determination of tax provisions involves complex judgments due to the group's operations across multiple tax jurisdictions[712](index=712&type=chunk) - **Impairment assessment of non-financial assets**: The assessment of recoverable amounts for property, plant, and equipment and right-of-use assets involves significant judgments on future cash flows, growth rates, and discount rates[719](index=719&type=chunk) [Consolidated Financial Statements](index=166&type=section&id=Consolidated_Financial_Statements) As of March 31, 2025, the group reported total assets of HK$1.394 billion, total liabilities of HK$323 million, and total equity of HK$1.072 billion, with a net loss attributable to equity holders of HK$33.89 million [Consolidated Statement of Profit or Loss](index=166&type=section&id=Consolidated_Statement_of_Profit_or_Loss) For the year, the group reported revenue of HK$625.9 million, a gross loss of HK$11.38 million, and a loss attributable to equity holders of HK$33.89 million, primarily due to sales costs exceeding revenue and other expenses Consolidated Statement of Profit or Loss Summary (HKD thousand) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | **Revenue** | 625,876 | 689,269 | | **Gross Profit/(Loss)** | (11,384) | 29,106 | | **Profit/(Loss) Before Tax** | (44,424) | 12,622 | | **Profit/(Loss) for the Year Attributable to Owners of the Company** | (33,890) | 20,221 | [Consolidated Statement of Financial Position](index=168&type=section&id=Consolidated_Statement_of_Financial_Position) As of March 31, 2025, total assets were HK$1.394 billion, with non-current assets at HK$778 million (including HK$467 million in investment properties), total liabilities at HK$323 million, and net assets of HK$1.072 billion, indicating strong short-term solvency Consolidated Statement of Financial Position Summary (HKD thousand) | Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Total Non-Current Assets** | 778,213 | 788,325 | | **Total Current Assets** | 616,004 | 721,120 | | **Total Assets** | **1,394,217** | **1,509,445** | | **Total Current Liabilities** | 225,904 | 226,197 | | **Total Non-Current Liabilities** | 96,728 | 97,648 | | **Total Liabilities** | **322,632** | **323,845** | | **Total Equity** | **1,071,585** | **1,185,600** | [Consolidated Statement of Cash Flows](index=172&type=section&id=Consolidated_Statement_of_Cash_Flows) Net cash from operating activities significantly decreased to HK$4.03 million, while investing activities generated HK$67.35 million, and financing activities resulted in a net outflow of HK$75.14 million, leading to a net decrease in cash and cash equivalents of HK$3.76 million Consolidated Statement of Cash Flows Summary (HKD thousand) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | **Net Cash Flows from Operating Activities** | 4,031 | 45,041 | | **Net Cash Flows from Investing Activities** | 67,354 | 2,907 | | **Net Cash Flows Used in Financing Activities** | (75,141) | (28,816) | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | (3,756) | 19,132 | [Notes to Financial Statements](index=175&type=section&id=Notes%20to%20Financial%20Statements) The notes provide detailed explanations of the financial statements' basis of preparation, accounting policies, key judgments, and estimates, with in-depth analysis of segment information, revenue, investment property valuation, and receivables - **Segment Information**: The group operates in two main segments: "Manufacturing and Sales of Footwear Products" and "Property Investment," with footwear contributing the vast majority of revenue but incurring a loss, while property investment provides stable rental income and profit[968](index=968&type=chunk)[972](index=972&type=chunk) - **Investment Properties**: As of March 31, 2025, investment properties had a fair value of **HK$467 million**, with a revaluation fair value loss of **HK$15.57 million** recorded for the year[1068](index=1068&type=chunk) - **Trade Receivables**: Net trade receivables decreased from HK$167 million to **HK$112 million**, with the vast majority of balances aged within 90 days, indicating good collection performance[1091](index=1091&type=chunk)[1094](index=1094&type=chunk)

[Financial Highlights & Results Announcement](index=1&type=section&id=Financial%20Highlights%20%26%20Results%20Announcement) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the year ended March 31, 2025, the Group's revenue decreased by 9.2% to HK$626 million, shifting from profit to a HK$33.89 million loss, with gross margin turning negative and total dividends per share decreasing by 55.6% to 4.0 HK cents FY2025 Financial Highlights | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (HK$ thousand) | 625,876 | 689,269 | -9.2% | | Gross Profit / (Loss) (HK$ thousand) | (11,384) | 29,106 | N/A | | Gross Profit Margin / (Loss Margin) (%) | (1.8)% | 4.2% | -6.0 percentage points | | Profit / (Loss) Attributable to Owners of the Company for the Year (HK$ thousand) | (33,890) | 20,221 | N/A | | Basic Earnings / (Loss) Per Share (HK cents) | (5.05) | 3.00 | N/A | | Total Dividends Per Share for the Year (HK cents) | 4.0 | 9.0 | -55.6% | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for the year show the Group shifted from profit to loss, primarily due to decreased revenue and cost of sales pressure leading to negative gross profit, alongside reduced net assets and cash and cash equivalents [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) This year's revenue was HK$626 million, down 9.2%, resulting in a HK$11.38 million gross loss compared to last year's gross profit, and an annual loss of HK$36.67 million, with HK$33.89 million attributable to owners and a basic loss per share of 5.05 HK cents Consolidated Income Statement Key Figures | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 625,876 | 689,269 | | Gross Profit / (Loss) | (11,384) | 29,106 | | Profit / (Loss) Before Tax | (44,424) | 12,622 | | Profit / (Loss) for the Year | (36,666) | 20,057 | | Loss Attributable to Owners of the Company | (33,890) | 20,221 | | Basic Loss Per Share (HK cents) | (5.05) | 3.00 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive expense for the year was HK$43.86 million, a significant increase from HK$3.47 million last year, primarily due to the annual loss and exchange differences from translating foreign operations - Total comprehensive expense for the year was **HK$43.86 million**, significantly higher than **HK$3.47 million** last year, primarily impacted by the annual loss and exchange differences[7](index=7&type=chunk) [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, the Group's net assets decreased to HK$1.072 billion from HK$1.186 billion last year, with net current assets reducing and cash and cash equivalents decreasing from HK$416 million to HK$353 million Consolidated Balance Sheet Summary | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Non-Current Assets | 778,213 | 788,325 | | Total Current Assets | 616,004 | 721,120 | | Total Current Liabilities | 225,904 | 226,197 | | Net Assets | 1,071,585 | 1,185,600 | | Cash and Cash Equivalents | 352,694 | 415,580 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) The financial statements are prepared under Hong Kong Financial Reporting Standards, with the Group's business divided into 'Manufacturing and Sale of Footwear Products' and 'Property Investment' segments, where the footwear business recorded a loss, dividend policy became conservative, and accounts receivable days outstanding slightly increased [Basis of Preparation & Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20%26%20Accounting%20Policies) The financial statements are prepared on a historical cost basis, with several revised Hong Kong Financial Reporting Standards adopted for the first time, which the Group assessed had no significant impact on its financial position or performance - The Group has adopted HKFRS 16 and amendments to HKAS 1 and HKAS 7 for the first time, but assessed that these revisions had no impact on its financial statements[15](index=15&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) [Operating Segment Information](index=9&type=section&id=Operating%20Segment%20Information) The Group's core 'Manufacturing and Sale of Footwear Products' segment loss expanded to HK$55.43 million, while 'Property Investment' segment profit decreased to HK$5.91 million; European market revenue grew, while US, Asia, and other regions declined, with sales to largest customer A decreasing and customer B no longer a major client Segment Results (HK$ thousand) | Segment | 2025 Results | 2024 Results | | :--- | :--- | :--- | | Manufacturing and Sale of Footwear Products | (55,425) | (19,346) | | Property Investment | 5,912 | 21,655 | Revenue by Geographical Region (HK$ thousand) | Region | 2025 | 2024 | | :--- | :--- | :--- | | United States of America | 152,412 | 182,333 | | Europe | 220,527 | 182,133 | | Asia | 124,975 | 133,634 | | Others | 127,962 | 191,169 | - Sales to the largest customer A decreased from **HK$534 million** to **HK$448 million** - Customer B, which accounted for over 10% last year, had sales below the 10% disclosure threshold this year, indicating a shift in customer concentration[26](index=26&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board recommended a special final dividend of 2.0 HK cents per share, with no final dividend, bringing the total dividend for the year to 4.0 HK cents per share, a significant decrease from 9.0 HK cents last year Proposed Dividend Details | Dividend Type | 2025 (Per Share) | 2024 (Per Share) | | :--- | :--- | :--- | | Final Dividend | Nil | 0.2 HK cents | | Special Final Dividend | 2.0 HK cents | 6.8 HK cents | [Accounts Receivable & Payable](index=16&type=section&id=Accounts%20Receivable%20%26%20Payable) At year-end, total accounts receivable decreased from HK$167 million to HK$112 million, with most balances within 90 days, while total accounts payable increased from HK$102 million to HK$111 million, maintaining a healthy aging structure - Accounts receivable are primarily related to a few well-known customers, with credit terms typically ranging from **30 to 90 days**, and the Group implements strict credit risk control[36](index=36&type=chunk) Accounts Receivable and Payable Aging Analysis (Within 90 Days) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accounts Receivable (Within 90 Days) | 109,257 | 121,214 | | Accounts Payable (Within 90 Days) | 92,227 | 66,030 | [Chairman's Statement & Management Discussion and Analysis](index=19&type=section&id=Chairman%27s%20Statement%20%26%20MD%26A) [Chairman's Statement](index=19&type=section&id=Chairman%27s%20Statement) The Chairman's Statement highlights severe manufacturing challenges this year, but the Group demonstrated competitive advantages and resilience through robust financials, cross-regional production, and advanced footwear technology; looking ahead, the Group will focus on six strategic action plans to navigate the complex market [Macroeconomic Discussion](index=20&type=section&id=Macroeconomic%20Discussion) The global economic outlook remains uncertain with extremely low market visibility; US tariff measures, geopolitical uncertainties, and Middle East tensions introduce significant variables for retail and manufacturing, disrupting retailers' inventory strategies, leading to continued conservative ordering by brand clients with short lead times and small batches - US government's reciprocal tariff measures and escalating geopolitical uncertainties have led to chaotic retailer inventory strategies and conservative purchasing behavior[43](index=43&type=chunk) - In the short term, the **ninety-day tariff reprieve** stimulated inventory replenishment, leading to a temporary surge in orders, but the Group remains conservative, preparing for market volatility after the buffer period ends[43](index=43&type=chunk) [Strategy and Outlook](index=20&type=section&id=Strategy%20and%20Outlook) The Group will focus on advancing six strategic action plans to respond to market changes, with no short-term expansion plans, instead optimizing existing facilities in Vietnam and Cambodia; the core strategy involves continued investment in labor skills and equipment upgrades, focusing on high-value footwear R&D and production, actively developing new clients, implementing strict cost control, and promoting ESG initiatives - The Group will focus on advancing six strategic action plans: enhancing business momentum, capacity planning, pursuing operational excellence, mitigating cost inflation, talent development, and resilience and sustainability[45](index=45&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[53](index=53&type=chunk) - There are no short-term plans for factory expansion; instead, the focus will be on optimizing existing facilities in **Vietnam and Cambodia**, while considering long-term expansion to other production bases to address tariff issues[47](index=47&type=chunk) - To address cost pressures, the Group will maintain competitive advantages through lean manufacturing, automation, and strict cost control, but acknowledges that direct labor costs remain high in the short term due to the need to maintain quick turnaround capabilities[50](index=50&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) Management provided an in-depth analysis of this year's performance, noting a financial shift from profit to loss due to decreased revenue and increased costs; operationally, the Group actively addressed weak market demand and rising production costs through geographical diversification and new client acquisition, maintaining a robust financial position with no bank borrowings and continuing share repurchases to enhance shareholder value [Financial Performance Review](index=27&type=section&id=Financial%20Performance%20Review) This year's turnover decreased by 9.2% to HK$626 million, primarily due to a 6.5% decline in business volume and a 5.9% drop in average selling price, resulting in a HK$11 million gross loss due to reduced economies of scale, rising labor wages, and lower average selling prices, and a net loss attributable to owners of approximately HK$34 million compared to last year's net profit of HK$20 million - Turnover decreased by **9.2%** to approximately **HK$626 million**, with business volume (pairs) decreasing by **6.5%** and average selling price recording a **5.9%** drop[60](index=60&type=chunk) - Shifted from profit to a net loss of approximately **HK$34 million**, primarily due to gross profit turning into gross loss, and the fair value loss on investment properties expanding to approximately **HK$16 million**[62](index=62&type=chunk)[64](index=64&type=chunk) Key Financial Ratios Changes | Ratio | 2025 | 2024 | | :--- | :--- | :--- | | Accounts Receivable Days Turnover (days) | 82 | 80 | | Accounts Payable Days Turnover (days) | 100 | 123 | | Inventory Days Turnover (days) | 95 | 109 | | Gearing Ratio (%) | 0% | 0% | [Operational Review](index=30&type=section&id=Operational%20Review) The Group's production bases in Vietnam and Cambodia addressed challenges of weak demand and rising costs; to diversify risk, three new European brand clients were added this year, reducing major clients' share of total turnover from 95% to 74.5%, with production centered in Vietnam (51.1% output) and Cambodia (48.9%), and investment in an associate contributing HK$23 million in profit - To diversify the market, three new European fashion and sports brands were added this year, reducing the proportion of major clients (Cat, Dr. Martens, etc.) in total turnover from **95.0%** to **74.5%**[67](index=67&type=chunk)[72](index=72&type=chunk) - The revenue contribution from the European market increased from **26.4%** to **35.2%**, while the US market share decreased from **26.5%** to **24.4%**[70](index=70&type=chunk) - The **40%**-owned Vietnamese associate showed strong business performance, with turnover increasing to approximately **HK$1.339 billion**, contributing approximately **HK$23 million** in share of profit to the Group[75](index=75&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) The Group maintained a robust financial position, holding approximately HK$353 million in cash at year-end, with no interest-bearing bank borrowings and a zero gearing ratio, and a current ratio of 2.7; the Group adopted a conservative foreign exchange risk management policy and repurchased 8.924 million shares during the year for approximately HK$7.17 million - As of March 31, 2025, the Group's cash and cash equivalents were approximately **HK$353 million**, with no interest-bearing bank borrowings and a **zero** gearing ratio[77](index=77&type=chunk) - During the year, the company repurchased **8,924,000** ordinary shares on the Stock Exchange for a total consideration of approximately **HK$7.17 million**, aiming to enhance net assets per share and earnings per share[80](index=80&type=chunk)[81](index=81&type=chunk) [Corporate Governance & Other Matters](index=18&type=section&id=Corporate%20Governance%20%26%20Other%20Matters) [Dividends and Share Repurchase](index=18&type=section&id=Dividends%20and%20Share%20Repurchase) The Group announced a special final dividend of 2.0 HK cents per share, with no final dividend; additionally, the company actively conducted share repurchases during the year, buying back and canceling 8,924,000 ordinary shares to enhance shareholder returns - The Directors recommended a special final dividend of **2.0 HK cents** per ordinary share for the year, with no final dividend[39](index=39&type=chunk) - During the fiscal year, **8,924,000** ordinary shares were repurchased at prices ranging from **HK$0.63 to HK$0.88** per share, considered a constructive action to enhance shareholder returns[39](index=39&type=chunk)[80](index=80&type=chunk) [Employee and Remuneration Policy](index=37&type=section&id=Employee%20and%20Remuneration%20Policy) As of March 31, 2025, the Group employed approximately 6,400 staff; remuneration policy is based on market levels and individual performance, with share option and share award schemes to incentivize and retain talent, and during the year, the trustee purchased shares for the share award scheme, granting some award shares and share options - As of March 31, 2025, the Group employed approximately **6,400** staff[82](index=82&type=chunk) - During the year, the trustee of the share award scheme purchased **8,884,000** shares, and **3,744,000** award shares were granted; additionally, the Group granted **2,800,000** share options[82](index=82&type=chunk) [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code in the Stock Exchange Listing Rules during the year; the Audit Committee, comprising three independent non-executive directors and one non-executive director, reviewed the annual consolidated results, deeming them prepared in accordance with accounting standards and adequately disclosed, and all directors confirmed compliance with the standard code for securities transactions - The Directors confirmed that the company complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the year[83](index=83&type=chunk) - The Audit Committee reviewed the annual results with management and external auditor Ernst & Young, expressing satisfaction with their compliance and adequacy[84](index=84&type=chunk) [Publication of Announcement and Report](index=39&type=section&id=Publication%20of%20Announcement%20and%20Report) The financial figures in this preliminary results announcement have been agreed with the draft financial statements by the company's auditor, Ernst & Young; the full annual report will be dispatched to shareholders in due course and published on the Stock Exchange and company website - The full-year results announcement and annual report will be available for review on the Stock Exchange website (www.hkex.com.hk) and the company's website[87](index=87&type=chunk)

Group 1 - The company, Xinxing Group, is experiencing a downward trend in revenue for the first half of the fiscal year ending September 30, 2024, which is expected to continue into the remaining period of the fiscal year ending March 31, 2025 [1] - The anticipated loss for the period is estimated to be between approximately HKD 33 million and HKD 38 million, compared to a profit in the previous year [1] - The revenue is projected to decrease by approximately 10% year-on-year, leading to reduced economies of scale, alongside significant increases in labor costs compared to the same period last year [1] Group 2 - The company plans to continue strategic investments to strengthen production capabilities, including retaining a skilled labor force to demonstrate operational reliability [1] - The company aims to optimize its product mix by collaborating with specific clients to focus on higher average selling price products, thereby advancing its value growth strategy [1] - The company will adhere to capital management and cost control programs to maintain financial resilience [1] Group 3 - The U.S. government announced reciprocal tariff measures to be implemented globally starting April 2, 2025, which is expected to exacerbate existing challenges and uncertainties for the company [2] - The company anticipates that the order pipeline will remain uncertain due to evolving U.S. tariff policies on footwear products from Vietnam and Cambodia [2] - Despite the expected short-term cost increases from these strategic measures, the company believes they will strengthen its long-term advantages and recovery capabilities [2]

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 326,065,000, a decrease of 14.9% compared to HKD 383,032,000 in the same period of 2023[2] - Gross profit for the same period was HKD 2,956,000, representing a significant decline of 86.5% from HKD 21,819,000, with a gross margin of 0.9% compared to 5.7%[2] - The loss attributable to equity holders of the company was HKD 12,967,000, compared to a profit of HKD 21,909,000 in the previous year[2] - Basic and diluted earnings per share were both HKD (1.93), down from HKD 3.24 in the prior year[8] - The total comprehensive loss for the period was HKD 5,893,000, compared to a comprehensive income of HKD 9,396,000 in the same period last year[10] - The adjusted loss before tax for the manufacturing and sales of footwear products was HKD (25,108) for the six months ended September 30, 2024, compared to a loss of HKD (1,821) in the same period of 2023[23] - The group’s net loss for the six months ended September 30, 2024, was HKD (13,582), compared to a profit of HKD 22,062 in the same period of 2023[23] - Revenue for the period was approximately HKD 326,100,000, down 14.9% year-on-year from HKD 383,000,000, primarily due to an 8.5% decrease in business volume and a 7.4% drop in average selling price[53] - Gross profit fell by 86.5% to approximately HKD 3,000,000, down from HKD 21,800,000 in the previous year, attributed to reduced economies of scale and increased labor costs[56] Assets and Liabilities - Total assets as of September 30, 2024, amounted to HKD 1,441,662, a decrease from HKD 1,509,445 as of March 31, 2024[23] - Total liabilities as of September 30, 2024, were HKD 312,365, down from HKD 323,845 as of March 31, 2024[23] - Non-current assets totaled HKD 794,254,000, slightly up from HKD 788,325,000 as of March 31, 2024[12] - Current assets decreased to HKD 647,408,000 from HKD 721,120,000, primarily due to a reduction in cash and cash equivalents[12] - Current liabilities were HKD 213,094,000, down from HKD 226,197,000, indicating improved liquidity management[14] Cash and Liquidity - Total cash and cash equivalents amounted to approximately HKD 323,000,000 as of September 30, 2024[2] - The company maintained a healthy liquidity position with net cash of approximately HKD 323,000,000 as of September 30, 2024, compared to HKD 416,000,000 as of March 31, 2024[59] - The group's current ratio was approximately 3.0 and the quick ratio was about 2.6 as of September 30, 2024, compared to 3.2 and 2.8 respectively as of March 31, 2024[80] - The group has no interest-bearing bank borrowings as of September 30, 2024, maintaining a leverage ratio of zero[80] - The group secured a total bank credit of approximately HKD 40 million as of September 30, 2024, with none utilized[80] Dividends - The company declared a special interim dividend of HKD 2.0 per share, compared to HKD 0.5 in the previous year[2] - The board proposed a special interim dividend of HKD 0.02 per share, up from HKD 0.005 per share in the previous year, while no interim dividend was recommended for this period[60] - The board declared a special interim dividend of HKD 0.02 per ordinary share, amounting to approximately HKD 13.6 million, to be paid on January 27, 2025[86] Operational Highlights - The group operates 21 production lines with an annual capacity of approximately 7 million pairs of footwear, with a utilization rate of 58.3%, down from 60.1% in the previous year[64] - The group added two new brands to its customer portfolio during the period, focusing on high average selling price activewear brands[65] - The group’s production center in southern Vietnam contributed 52.6% of total output, while the Cambodian facility accounted for 47.4%[67][68] - The company faced challenges in its main export markets, leading to a weak order pipeline during the reporting period[52] - The company’s joint venture in Central Vietnam reported a decrease in profit contribution to approximately HKD 5,800,000, down from HKD 13,600,000 in the previous year[57] Employee and Sustainability Initiatives - The total number of employees increased to approximately 6,400 as of September 30, 2024, compared to about 6,200 a year earlier[92] - The group is actively enhancing employee skills and upgrading facilities to meet the increasingly complex and diverse production demands[77] - The group is committed to sustainable production practices and has implemented new measures to reduce its carbon footprint[77] Governance and Compliance - The audit committee consists of three independent non-executive directors and one non-executive director, responsible for reviewing and supervising the financial reporting process and internal control systems of the group[95] - The committee has reviewed the unaudited interim condensed consolidated financial information for the six months ending September 30, 2024, and confirmed that the preparation complies with applicable accounting standards and regulations[96] - All directors confirmed compliance with the standards set out in the code of conduct for securities transactions by directors during the six months ending September 30, 2024[96] - The interim report containing all information required by the listing rules will be sent to shareholders and is available on the Hong Kong Stock Exchange website and the company's website[98]