Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a total revenue of HKD 17.249 billion for the fiscal year ending March 31, 2025, representing a year-on-year decrease of 8.24% [2] - The net profit attributable to the parent company was HKD 2.063 billion, down 10.41% year-on-year, while the adjusted net profit increased by 1.3% to HKD 2.350 billion [2] - The company plans to distribute a final dividend of HKD 0.12 per share, with a payout ratio of 50.80% [2] Revenue Analysis - The company experienced a decline in revenue from the Chinese market by 16.49% year-on-year, while the North American market grew by 3.17% and the European market increased by 19.19% [3] - The Chinese market accounted for 58.70% of total revenue, indicating its continued importance despite current challenges [3] - The company is focusing on optimizing its offline channels, increasing the number of stores to 7,367 in the Chinese market [3] Profitability Analysis - The company's gross margin was 40.49%, an increase of 1.12 percentage points year-on-year, while the net margin was 12.75%, a slight decrease of 0.27 percentage points [4] - The gross margins for different product lines varied, with the sofa and related products seeing an increase, while the bedding segment faced a decline [4] - Overall, the company managed to control its operating expenses effectively, resulting in a total expense ratio decrease of 0.78 percentage points to 23.51% [4] Investment Recommendations - The company is positioned in a large consumer market with significant growth potential, particularly in its domestic sales and recovering export business [5] - Revenue forecasts for FY2026 to FY2028 have been adjusted to HKD 18.063 billion, HKD 19.369 billion, and HKD 20.889 billion respectively, reflecting a cautious outlook [5] - The expected earnings per share (EPS) for the same period are projected at HKD 0.59, HKD 0.65, and HKD 0.71, maintaining a "Buy" rating [5]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a total revenue of HKD 17.249 billion for the fiscal year ending March 31, 2025, representing a year-on-year decrease of 8.24% [2] - The net profit attributable to the parent company was HKD 2.063 billion, down 10.41% year-on-year, while the adjusted net profit increased by 1.3% to HKD 2.350 billion [2] - The company plans to distribute a final dividend of HKD 0.12 per share, with a payout ratio of 50.80% [2] Revenue Analysis - The company experienced a decline in revenue from the Chinese market by 16.49% year-on-year, while the North American market grew by 3.17% and the European market increased by 19.19% [3] - The Chinese market accounted for 58.70% of total revenue, indicating its continued importance despite current challenges [3] - The company is focusing on optimizing its offline channels, increasing the number of stores to 7,367 in China [3] Profitability Analysis - The company's gross margin was 40.49%, an increase of 1.12 percentage points year-on-year, while the net margin was 12.75%, a slight decrease of 0.27 percentage points [4] - The gross margins for different product lines varied, with the sofa and related products seeing an increase, while bedding products faced a decline [4] - Overall, the company managed to control its operating expenses effectively, resulting in a total expense ratio decrease of 0.78 percentage points to 23.51% [4] Investment Recommendations - The company is positioned in a large consumer market with significant growth potential, particularly in its domestic sales and recovering export business [5] - Revenue forecasts for FY2026 to FY2028 are adjusted to HKD 18.063 billion, HKD 19.369 billion, and HKD 20.889 billion, respectively [5] - The expected earnings per share (EPS) for the same period are projected at HKD 0.59, HKD 0.65, and HKD 0.71, maintaining a "Buy" rating [5]

Core Viewpoint - The company reported a decline in FY25 revenue and net profit, primarily due to fair value losses and impairment provisions, but showed resilience in e-commerce and North American markets [1][2] Group 1: Financial Performance - FY25 total revenue was HKD 16.9 billion, down 8.2% year-on-year; net profit attributable to shareholders was HKD 2.06 billion, down 10.4% year-on-year [1] - Excluding fair value changes and impairment provisions, net profit was HKD 2.35 billion, up 1.3% year-on-year, with a net profit margin of 13.9%, an increase of 1.3 percentage points [1] Group 2: Domestic Sales - Domestic sales revenue was HKD 9.93 billion, down 17.2% year-on-year, with H2 revenue also at HKD 4.95 billion, down 17.2% [1] - The gross margin for domestic sales was 40.4%, unchanged year-on-year, with H2 gross margin at 40.6%, up 1 percentage point [1] - E-commerce outperformed offline sales, with FY25 e-commerce and offline revenues at HKD 2.19 billion and HKD 6.8 billion, down 16.3% and 16.6% year-on-year respectively [1] Group 3: Product Performance - Sofa sales outperformed bedding, with domestic sofa and bedding revenues at HKD 6.58 billion and HKD 2.41 billion, down 15.4% and 19.4% year-on-year respectively [1] - Sofa sales volume and price decreased by 10.6% and 5.4% year-on-year [1] Group 4: International Sales - North American revenue was HKD 4.42 billion, up 3.2% year-on-year, while European revenue was HKD 1.47 billion, up 22.9% year-on-year [2] - H2 revenue for North America and Europe was HKD 2.27 billion and HKD 0.74 billion, up 0.9% and 11% year-on-year respectively [2] - Gross margins for North America and Europe were 41.5% and 31%, up 4.4 and 0.7 percentage points year-on-year [2] Group 5: Investment Outlook - The domestic functional sofa penetration rate is expected to continue increasing, with a forecasted improvement in performance due to dealer and store transformations [2] - The company has overseas bases in Vietnam and Mexico to mitigate tariff changes, and the high growth in the European market reduces reliance on the U.S. [2] - The current valuation is at a historical low, with a stable dividend rate above 50% (FY25 dividend rate at 50.8%) and a dividend yield of 6.4%, indicating strong investment value [2]

Core Viewpoint - The overall performance of the home furnishing industry is declining, and even leading functional sofa company Man Wah Holdings is not immune to this trend, reporting a decrease in revenue and profits in its 2024 financial year [1] Financial Performance - Man Wah Holdings reported a revenue of HKD 16.902 billion for the fiscal year 2024, a year-on-year decline of 8.2% [1] - Gross profit decreased to HKD 6.844 billion, down 5.57% year-on-year [1] - Operating profit fell to HKD 2.824 billion, a decline of 7.74% [1] - Profit attributable to equity holders was HKD 2.062 billion, down 10.4% year-on-year [1] Domestic Market Performance - The domestic market saw a significant revenue drop of 17.2%, with sales revenue of HKD 9.927 billion [3] - Sofa sales in the domestic market decreased by approximately 10.6%, leading to a revenue decline of 15.4% to HKD 6.584 billion [2][3] - The company sold 1.885 million sofas, a slight decrease of 0.9% year-on-year [2] Product and Business Segmentation - The main product line remains functional sofas, contributing approximately HKD 11.743 billion, accounting for 68% of total revenue [2] - The company has five business segments, with sofas and related products being the core segment [2] Overseas Market Recovery - The overseas market revenue reached approximately HKD 6.666 billion, an increase of 8.33% year-on-year [5] - North America contributed HKD 4.42 billion, up 3.17%, while Europe saw a revenue increase of 19.24% to HKD 1.58 billion [5] - The company exported approximately 884,000 sofas to overseas markets, a year-on-year increase of about 13% [5] Strategic Initiatives - The company is expanding its domestic store network, adding 131 new stores, bringing the total to 7,367 [4] - Man Wah Holdings aims to leverage government policies like "trade-in for new" to stimulate consumer demand [4] Challenges and Risks - The company faces challenges from a competitive domestic market and rising costs due to increased shipping and port fees, which rose by 31% to HKD 771 million [7] - The ongoing geopolitical tensions, particularly related to the Ukraine situation, pose additional risks [7] - The company is adapting to changes in international trade policies, particularly U.S. tariffs, and is focusing on maintaining its market position in North America and Europe while exploring new growth opportunities in emerging markets [7]

Core Viewpoint - The company reported a decline in both revenue and net profit for FY2025, with a focus on the challenges faced in domestic sales and a slight slowdown in international sales [1][2]. Revenue Summary - For FY2025, the company achieved a main revenue of 16.903 billion HKD and a net profit of 2.063 billion HKD, representing a year-on-year decrease of 8% and 10% respectively [1]. - In FY2025H2, the revenue was 8.597 billion HKD and net profit was 0.924 billion HKD, showing a decline of 9% and 21% year-on-year [1]. - Domestic sales faced pressure with a 17% decline in furniture sales, while online and offline sales decreased by 18% and 11% respectively [1]. - International sales showed a slight increase of 4%, with North America and Europe growing by 1% and 11% respectively [1]. Profitability Summary - The company experienced improvements in gross margin and operating profit margin due to raw material price reductions and cost control measures [2]. - The gross margin and net profit margin for FY2025 increased by 1.1 and decreased by 0.3 percentage points respectively [2]. - The average unit costs for various materials decreased, with leather and chemicals seeing reductions of 6.7% and 9.8% respectively [2]. - Advertising and management expenses decreased by 30% and 22% respectively, while tariff expenses dropped significantly by 89% due to increased shipments from Vietnam [2]. Future Outlook - Domestic sales are expected to face ongoing pressure from the real estate and consumer environment, but there are marginal benefits from national subsidies for home furnishings [3]. - The company plans to restructure its dealer and store layout to enhance operational efficiency and improve brand presence through new online channels [3]. - For international sales, if the current low tariff levels in the U.S. persist, the impact may remain manageable, with advantages in overseas production capacity becoming more evident [3]. - The company maintains a dividend payout ratio of 51%, with projected net profits for FY2026 to FY2028 expected to be 2.4 billion, 2.59 billion, and 2.85 billion HKD respectively, corresponding to PE ratios of 6.9, 6.3, and 5.8 times [3].

Core Viewpoint - The company's FY25 performance fell short of expectations, primarily due to impairment provisions, with a revenue of HKD 16.903 billion and a net profit of HKD 2.063 billion, reflecting year-on-year declines of 8.2% and 10.4% respectively [1][2] Group 1: Sales Performance - Domestic sales faced significant pressure, with FY25 domestic revenue at HKD 9.927 billion, down 17.2% year-on-year, while international sales showed resilience, particularly in Europe, with a revenue increase of 22.9% to HKD 1.469 billion [1] - The company's sofa revenue was HKD 6.584 billion, down 15.4%, and mattress revenue was HKD 2.408 billion, down 19.4% [1] Group 2: Cost Management and Profitability - The company achieved a gross margin of 40.5% in FY25, an increase of 1.1 percentage points year-on-year, driven by improved operational efficiency and stable raw material costs [2] - The net profit margin was 12.20%, a slight decrease of 0.3 percentage points year-on-year, impacted by impairment provisions [2] Group 3: Store Optimization and Future Strategy - The company added 131 stores, bringing the total to 7,367, although there was a net decrease of 149 stores in the second half of the fiscal year due to optimization strategies [2] - The company plans to accelerate its online channel development following the optimization of its offline store network [2] Group 4: Profit Forecast and Valuation - Due to the pressure on domestic demand and external trade risks, the company revised its FY2026 net profit forecast down by 21% to HKD 2.128 billion and introduced a FY2027 forecast of HKD 2.255 billion [2] - The current stock price corresponds to a P/E ratio of 8/7 for FY2026/FY2027, with a target price adjustment down by 7% to HKD 6.5, indicating a potential upside of 53% from the current price [2]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported FY2025 results (April 2024 to March 2025) with main revenue and net profit of HKD 16.903 billion and HKD 2.063 billion, respectively, reflecting a year-on-year decline of 8% and 10% [2][6] - In FY2025H2, the company experienced a revenue decline in domestic sales, while international sales showed a slowdown; however, operating profit improved due to raw material price reductions and cost control [2][6] - The company is focusing on internal transformation to enhance competitiveness through channel and marketing changes, with a long-term view on its core competitive advantages despite short-term tariff disturbances in international sales [2][10] Revenue Summary - Domestic sales faced pressure in FY2025H2, with furniture sales down 17% in RMB terms, and online and offline sales decreasing by 18% and 11%, respectively [7] - International sales grew by 4% in FY2025H2, with North America and Europe showing increases of 1% and 11%, respectively [7] Profitability Summary - The gross margin and operating profit margin improved in FY2025, with gross margin increasing by 1.1 percentage points year-on-year [10] - The company managed to reduce advertising and management expenses by 30% and 22%, respectively, while tariff expenses decreased significantly by 89% due to increased shipments from its Vietnam factory [10] Future Outlook - The company anticipates continued pressure from the real estate and consumer environment but expects marginal benefits from national subsidies for home furnishings [10] - Plans include restructuring dealer and store layouts, enhancing online presence, and optimizing product positioning to improve competitiveness [10] - The company projects net profits of HKD 2.398 billion, HKD 2.590 billion, and HKD 2.849 billion for FY2026, FY2027, and FY2028, respectively, with corresponding PE ratios of 6.9, 6.3, and 5.8 [11]

Investment Rating - The report assigns a "Buy" rating to the company, expecting a price increase of over 15% in the next 6-12 months [4]. Core Insights - The company reported a revenue of HKD 16.9 billion for FY25, a decrease of 8.2% year-on-year, and a net profit of HKD 2.06 billion, down 10.4% year-on-year. The second half of FY25 saw revenue and net profit decline by 9.2% and 20.8%, respectively [1]. - The domestic market faced significant pressure, while the North American and European markets showed relative strength, with revenue growth of 3.2% and 19.2%, respectively [1][3]. - The company maintained a favorable dividend payout ratio of 50.8% for FY25, with a total dividend of HKD 0.27 per share [1]. Performance Analysis - Domestic sales were notably pressured, with a year-on-year decline of 16.5% in China, while North America and Europe experienced growth [1]. - The company’s gross margin improved by 1.1 percentage points to 40.5% due to a decrease in raw material costs, despite a decline in net margin by 0.3 percentage points to 12.8% [2]. - The company’s sofa sales volume decreased by 0.9% globally and 10.6% in China, indicating pricing pressure [1]. Financial Projections - The projected earnings per share (EPS) for FY26, FY27, and FY28 are HKD 0.52, HKD 0.57, and HKD 0.61, respectively, with corresponding price-to-earnings (P/E) ratios of 8X, 8X, and 7X [4][10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company reported a revenue of HKD 16.903 billion for the fiscal year 24/25, a decrease of 8.2% year-on-year, with a net profit attributable to shareholders of HKD 2.063 billion, down 10.41% year-on-year. However, excluding certain impairments, the adjusted net profit was HKD 2.35 billion, reflecting a growth of 1.3% due to effective cost control measures [1][11] Summary by Sections Domestic Sales - Revenue from the Chinese market was HKD 10.236 billion, a decline of 16.94% year-on-year, with a gross margin of 40.4%. The decline was attributed to construction pressures and weak terminal demand. Offline store revenue decreased by 16.56% to HKD 6.799 billion, while online sales fell by 16.33% to HKD 2.193 billion, although the latter showed signs of recovery in the second half of the fiscal year [2] International Sales - North American revenue increased by 3.17% to HKD 4.420 billion, with a gross margin improvement of 4.4 percentage points to 41.5%. European and other overseas markets saw a revenue increase of 22.90% to HKD 1.469 billion, driven by enhanced market promotion and expanded sales channels [3] Product Categories - Sofa and related products generated HKD 11.743 billion in revenue, down 7.24% year-on-year, with total sales volume of 1.885 million sets. Domestic sofa revenue decreased by 15.4%, while export sales volume increased by 13.04%, particularly in North America and Europe [4] Financial Metrics - The gross margin improved to 40.5%, up 1.1 percentage points year-on-year, primarily due to a decrease in raw material costs. The company effectively reduced its expense ratio to 23.51%, with a notable decrease in management expenses [5][10] Earnings Forecast and Valuation - The company is expected to achieve revenues of HKD 17.886 billion, HKD 19.168 billion, and HKD 20.570 billion over the next three fiscal years, with corresponding net profits of HKD 2.273 billion, HKD 2.492 billion, and HKD 2.720 billion. The current market valuation corresponds to a PE ratio of 7.24X, 6.60X, and 6.05X for the next three years [11][12]

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company reported a revenue of HKD 16.903 billion for the fiscal year 24/25, a decrease of 8.2% year-on-year, with a net profit attributable to shareholders of HKD 2.063 billion, down 10.41% year-on-year. Excluding fair value losses and impairment provisions, the adjusted net profit was HKD 2.35 billion, reflecting a 1.3% increase due to cost control measures [1] - The domestic market faced challenges with a revenue decline of 16.94% year-on-year, attributed to construction pressures and weak terminal demand. However, online sales showed resilience with a revenue of HKD 2.193 billion, down 16.33% year-on-year, but with a narrowing decline in the second half [2] - The North American market saw a revenue increase of 3.17% year-on-year, while the European market experienced a significant growth of 22.90% year-on-year, driven by enhanced market promotion and expanded sales channels [3] Summary by Sections Domestic Sales - Revenue from the Chinese market was HKD 10.236 billion, down 16.94% year-on-year, with a gross margin of 40.4% [2] - Offline store revenue decreased to HKD 6.799 billion, with a net increase of 131 stores, focusing on improving single-store revenue [2] - Online sales strategies included live streaming and collaborations with key influencers, contributing to brand visibility and sales growth [2] International Sales - North America generated HKD 4.420 billion in revenue, up 3.17% year-on-year, with a gross margin of 41.50% [3] - European and other overseas markets achieved revenue of HKD 1.469 billion, a 22.90% increase year-on-year, with a gross margin of 31.0% [3] Product Categories - Sofa and related products generated HKD 11.743 billion, down 7.24% year-on-year, with total sales of 1.885 million sets [4] - Bed products saw a revenue decline to HKD 2.408 billion, down 19.4% year-on-year, impacted by weak domestic demand [4] Financial Metrics - The gross margin improved to 40.5%, primarily due to a decrease in raw material costs [5] - The company effectively controlled expenses, with a period expense ratio of 23.51%, leading to significant profit release potential [10] - Future revenue projections estimate HKD 17.886 billion for 2025, reflecting a 6% growth, and net profit of HKD 2.273 billion, a 10% increase [11]