Core Viewpoint - The company, Viginie, has shown a recovery in its fiscal year 2025 performance, with an 11.7% increase in revenue to HKD 7.84 billion, despite challenges from macroeconomic fluctuations and uneven consumer recovery [1] Group 1: Business Performance - The intimate apparel segment generated revenue of HKD 4.243 billion, a modest increase of 3.0% year-on-year, accounting for 54.2% of total revenue, with a gross margin improvement of 1.0 percentage points to 24.7% [3] - The sports products segment emerged as a growth highlight, with revenue of HKD 2.934 billion, a significant increase of 26.9% year-on-year, representing 37.4% of total revenue, driven by a global sports trend and strong demand for sports bras [3] - The consumer electronics accessories segment, although smaller, saw robust growth with revenue of HKD 409 million, a substantial increase of 43.2% year-on-year, primarily driven by new product orders from core brand partners [3] Group 2: Operational Optimization - The company is advancing its smart transformation through vertical integration, intelligent management, automation, and localized supply chains to enhance production efficiency and cost control [4] - As of October 2024, the total output value from the Vietnam base accounted for 85% of total revenue, with approximately 31,900 employees in Vietnam compared to about 4,900 in mainland China [4] - The company's China operations generated revenue of HKD 1.966 billion in fiscal year 2025, a 4.4% increase year-on-year, with a net profit of HKD 85.6 million, benefiting from localized innovation and strong e-commerce performance [4] Group 3: Future Outlook - The company faces multiple challenges in fiscal year 2026 due to increased global market uncertainty from trade tariffs, leading to cautious order placements from brand partners [5] - The company is implementing cost-reduction measures across R&D, production, and operations to enhance organizational efficiency and effectiveness [5] - The company aims to leverage its leading Bonding technology to expand its successful cross-category initiatives from intimate apparel to sports and clothing segments, showcasing strong market potential [5]

[Financial Highlights](index=7&type=section&id=Financial%20highlights) The Group reported robust financial recovery in FY2025, marked by double-digit growth in revenue, gross profit, and adjusted profit attributable to owners [Financial Performance Highlights](index=7&type=section&id=Financial%20highlights) In FY2025, the Group achieved robust recovery with revenue up 11.7% and gross profit up 15.7%; profit attributable to owners surged 28.4%, with adjusted profit up 27.1%, and basic EPS increased to HKD 0.15, with a proposed final dividend of HKD 0.043 per share, totaling HKD 0.068 for the full year Key Financial Data Comparison for FY2025 | Metric | FY2025 (HKD thousands) | FY2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 7,840,043 | 7,016,802 | 11.7% | | **Gross Profit** | 1,832,567 | 1,583,567 | 15.7% | | **Gross Margin** | 23.4% | 22.6% | +0.8pp | | **Profit Attributable to Owners** | 183,891 | 143,175 | 28.4% | | **Adjusted Profit Attributable to Owners*** | 402,351 | 316,471 | 27.1% | | **EBITDA** | 1,057,835 | 1,011,975 | 4.5% | | **Adjusted EBITDA*** | 1,276,295 | 1,185,271 | 7.7% | | **Basic Earnings Per Share (HKD)** | 0.15 | 0.117 | +28.2% | | **Dividend Per Share (HKD)** | 0.068 | 0.057 | +19.3% | - Adjusted profit and adjusted EBITDA figures exclude special restructuring costs incurred due to the relocation of production facilities[23](index=23&type=chunk) [Chairman's Statement](index=8&type=section&id=Chairman%27s%20statement) The Chairman's statement highlights the Group's strategic resilience, achieving growth amidst economic uncertainty through core business focus, innovation, and a commitment to sustainability [Strategic Review and Outlook](index=9&type=section&id=Chairman%27s%20statement%20summary) Despite global economic uncertainties, the Group achieved low double-digit revenue growth in FY2025 through its IDM model and 'focus on core business' strategy, while actively pursuing cost efficiency, financial optimization, and leveraging proprietary Bonding technology for differentiated products, alongside market diversification and strong ESG commitments towards net-zero by 2050 - Leveraging its 'focus on core business and strengthening main operations' strategy, the Group's revenue in FY2025 continued the recovery trend from late FY2024, achieving **low double-digit growth**[29](index=29&type=chunk)[31](index=31&type=chunk) - The company has initiated cost reduction and efficiency enhancement measures, with effects expected to gradually materialize in FY2026, and plans to progressively reduce debt to a reasonable level within the next 2-3 years by strictly controlling capital expenditure[33](index=33&type=chunk)[34](index=34&type=chunk) - Proprietary Bonding process technology, developed in-house, became a core growth driver, leading to **significant revenue growth** in the functional apparel business in FY2025[36](index=36&type=chunk)[37](index=37&type=chunk) - To counter tariff measures initiated by major economies, the Group has engaged in discussions and reached consensus with key brand partners, expecting limited impact on revenue, while accelerating expansion into diversified markets such as China, Europe, and Japan[38](index=38&type=chunk)[40](index=40&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20discussion%20and%20analysis) This section provides an in-depth analysis of the Group's market performance, business segment results, operating financials, and strategic outlook for future growth and resilience [Market Review](index=15&type=section&id=Market%20Review) In FY2025, despite global economic volatility, the Group achieved stable revenue growth by leveraging its IDM model, technological innovation, and synergistic production capabilities in China and Vietnam, while its joint venture "Victoria's Secret China" demonstrated robust, industry-outperforming growth - Despite global economic volatility and weakened demand, the Group achieved **stable full-year revenue growth** through proactive strategic adjustments and business structure optimization[49](index=49&type=chunk)[52](index=52&type=chunk) - The Group effectively balanced regional market risks by having its Vietnam production base handle global orders and its China capacity focus on the domestic market[50](index=50&type=chunk) - The joint venture 'Victoria's Secret China' continued to achieve **robust, industry-outperforming growth** by leveraging brand value and differentiated product advantages, validating the success of its localization strategy[51](index=51&type=chunk)[52](index=52&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) In FY2025, the Group's total revenue grew 11.7% to HKD 7.84 billion, with net profit up 28.4% to HKD 184 million, driven by strong performance in sports products and consumer electronics accessories, while production optimization saw Vietnam contribute 85% of total revenue Revenue and Gross Profit Performance by Business Segment (FY2025) | Business Segment | Revenue (HKD millions) | YoY Change | Revenue Share | Gross Profit (HKD millions) | Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | **Intimate Wear** | 4,243.4 | +3.0% | 54.2% | 1,047.2 | 24.7% | | **Sports Products** | 2,934.1 | +26.9% | 37.4% | 652.8 | 22.3% | | **Consumer Electronics Accessories** | 408.9 | +43.2% | 5.2% | 79.1 | 19.4% | | **Bra Cups and Other Accessories** | 253.6 | -15.0% | 3.2% | 53.4 | 21.1% | | **Total** | **7,840.0** | **+11.7%** | **100.0%** | **1,832.6** | **23.4%** | - The strong growth in the Sports Products segment was primarily driven by **double-digit growth** in the sports bra business and differentiated functional apparel products developed using proprietary Bonding technology[69](index=69&type=chunk)[76](index=76&type=chunk) - Production layout continues to optimize, with the Shenzhen production base fully relocated to Zhaoqing in October 2024, and the Vietnam production base contributing **85%** of the Group's total revenue[83](index=83&type=chunk)[84](index=84&type=chunk) [The Group's Operating Results Analysis](index=20&type=section&id=The%20Group%27s%20Operating%20Results) The Group's total revenue grew 11.7% to HKD 7.84 billion, driven by strong demand in sports products and consumer electronics accessories, with gross margin improving to 23.4% and adjusted net profit increasing 27.1% to HKD 402 million, despite restructuring costs - Cost of sales as a percentage of revenue decreased from **77.4% to 76.6%**, primarily due to improved production efficiency, partially offset by initial ramp-up costs at the Zhaoqing factory[95](index=95&type=chunk)[97](index=97&type=chunk) - To optimize its China production layout, the Group relocated its Shenzhen production base to Zhaoqing, incurring special restructuring costs of approximately **HKD 218.5 million** this fiscal year, mainly for employee severance and fixed asset write-offs[108](index=108&type=chunk)[111](index=111&type=chunk) Key Financial Ratios | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Net Gearing Ratio** | 105.2% | 104.7% | | **Adjusted Net Gearing Ratio** | 79.9% | 87.6% | | **Trade Receivables Turnover Days** | 48 days | 45 days | | **Trade Payables Turnover Days** | 25 days | 25 days | - Total capital expenditure was **HKD 430.7 million**, a significant decrease from HKD 688 million in the previous fiscal year, primarily used for acquiring production lines and constructing Zhaoqing production facilities and staff dormitories[135](index=135&type=chunk)[140](index=140&type=chunk) [Future Prospects and Strategies](index=28&type=section&id=Future%20Prospects%20and%20Strategies) For FY2026, the Group will prioritize product differentiation, cost control, efficiency, and debt reduction to enhance profitability and financial resilience, while expanding market diversification and advancing ESG commitments towards net-zero by 2050 - The core strategy is to implement 'cost reduction, efficiency-driven transformation, and debt reduction,' with incremental cash flow from business optimization prioritized for lowering the gearing ratio to optimize capital structure[153](index=153&type=chunk)[155](index=155&type=chunk) - The Group will fully leverage its leading advantage in Bonding process technology, replicating its success from intimate wear and sports into the apparel business to drive growth through innovative products[157](index=157&type=chunk)[159](index=159&type=chunk) - To address macroeconomic challenges, the company will accelerate market diversification, focusing on expanding partnerships in China, Europe, and Japan to reduce reliance on a single market[158](index=158&type=chunk)[160](index=160&type=chunk) - Regarding ESG, the Group has initiated Science Based Targets initiative (SBTi) validation and plans to set scientific carbon reduction targets within the next one to two years, strategizing for **net-zero carbon emissions by 2050**[161](index=161&type=chunk)[164](index=164&type=chunk) [Profile of Directors, Senior Management and Company Secretary](index=31&type=section&id=Profile%20of%20directors%2C%20senior%20management%20and%20company%20secretary) This section provides detailed professional biographies of the company's directors, senior management, and company secretary, highlighting their extensive experience and qualifications [Directors and Senior Management Profiles](index=31&type=section&id=Profile%20of%20directors%2C%20senior%20management%20and%20company%20secretary) This chapter details the personal profiles of the company's executive directors, independent non-executive directors, senior management, and company secretary, covering their age, positions, responsibilities, industry experience, educational backgrounds, and other public company or social organization appointments, comprehensively showcasing the professional background and qualifications of the company's governance and management team - Founder Mr. YY Hung serves as Chairman and Chief Executive Officer, possessing **over 25 years of experience** in the intimate wear manufacturing industry and acting as a key driver of the Group's business strategy[166](index=166&type=chunk)[170](index=170&type=chunk) - Executive directors have served the Group for many years, responsible for finance, R&D, production operations, and sales and marketing, each possessing **profound industry experience**[169](index=169&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) - The independent non-executive directors team comprises seasoned professionals from the finance, apparel trade, and retail industries, providing **strategic advice and guidance** for the Group's business development[177](index=177&type=chunk)[186](index=186&type=chunk)[190](index=190&type=chunk) [Report of the Directors](index=38&type=section&id=Report%20of%20the%20directors) The Directors' Report summarizes the company's FY2025 activities, performance, and dividend proposals, including details on share capital, key business relationships, and governance compliance [Summary of the Report of the Directors](index=38&type=section&id=Report%20of%20the%20directors) This report outlines the company's key activities, performance, and dividend distribution for FY2025, confirming its primary engagement in investment holding and its subsidiaries' focus on manufacturing and trading intimate wear and related products, with a proposed final dividend of HKD 0.043 per share, detailed disclosures on share capital changes, major customers and suppliers (top five customers accounting for 47.7% of sales), related party transactions, and compliance with listing rules - The Board recommends a final dividend of **HKD 0.043 per share** for the year ended March 31, 2025[204](index=204&type=chunk)[209](index=209&type=chunk) - The share option scheme adopted by the company on September 11, 2015, is nearing expiry, with no options granted since its adoption; the company will propose adopting a new share option scheme at the Annual General Meeting[227](index=227&type=chunk)[232](index=232&type=chunk) - This fiscal year, the Group's top five customers accounted for **47.7%** of total sales, with the largest customer contributing **16.5%**; the top five suppliers accounted for **39.7%** of total purchases[249](index=249&type=chunk)[253](index=253&type=chunk) - The report details several continuing connected transactions, including sales agreements with Joyful Profit Group and Float Limited, and property and plant lease agreements with Sun Cheong, Regina Miracle Technology, and Regina Miracle Investment, confirming all transactions were conducted on fair and reasonable commercial terms[275](index=275&type=chunk)[285](index=285&type=chunk)[292](index=292&type=chunk)[300](index=300&type=chunk) [Corporate Governance Report](index=62&type=section&id=Corporate%20governance%20report) The Corporate Governance Report details the company's adherence to high governance standards, board structure, committee functions, risk management, and shareholder communication practices [Corporate Governance Practices](index=62&type=section&id=Corporate%20governance%20report) The company is committed to maintaining high corporate governance standards, complying with listing rules' code, with the only deviation being the combined roles of Chairman and CEO, which the Board believes enhances decision-making efficiency; the report details board composition, committee operations (Audit, Remuneration, Nomination, ESG, Executive), risk management, internal controls, and mechanisms for shareholder rights and investor communication - The company complies with most provisions of the Corporate Governance Code, with the exception of the Chairman and Chief Executive Officer roles being held by the same individual, Mr. YY Hung, an arrangement the Board believes facilitates more efficient business planning and decision-making[368](index=368&type=chunk)[371](index=371&type=chunk) - The Board comprises five executive directors and three independent non-executive directors, with independent non-executive directors accounting for **over one-third**, meeting listing rule requirements[380](index=380&type=chunk)[386](index=386&type=chunk) - The company has five Board committees: Audit, Remuneration, Nomination, Environmental, Social and Governance (ESG), and Executive, each fulfilling distinct roles to assist the Board in its duties[427](index=427&type=chunk)[431](index=431&type=chunk) - The Board has conducted an annual review of the Group's risk management and internal control systems, deeming them effective and adequate, and has established a **three-lines-of-defense** risk governance framework[469](index=469&type=chunk)[477](index=477&type=chunk)[478](index=478&type=chunk) [Independent Auditor's Report](index=84&type=section&id=Independent%20auditor%27s%20report) The Independent Auditor's Report provides an unqualified opinion on the FY2025 financial statements, highlighting revenue recognition as a key audit matter and detailing the audit procedures performed [Audit Opinion and Key Audit Matters](index=84&type=section&id=Independent%20auditor%27s%20report) PricewaterhouseCoopers issued an unqualified audit opinion on the company's FY2025 consolidated financial statements, deeming them to fairly present the Group's financial position and operating results; 'revenue recognition' was identified as a key audit matter due to its volume and significance, with auditors performing various procedures including internal control assessment, sampling, analytical review, and cutoff tests, expressing satisfaction with the findings - The auditors believe that the consolidated financial statements fairly and accurately reflect the Group's consolidated financial position as at March 31, 2025, and its financial performance and cash flows for the year, in accordance with Hong Kong Financial Reporting Standards[509](index=509&type=chunk)[510](index=510&type=chunk) - 'Revenue recognition' was identified as a key audit matter primarily due to the **high volume of transactions**, numerous customers, dispersed distribution locations, and the material impact of revenue on the financial statements[515](index=515&type=chunk)[523](index=523&type=chunk) - To address revenue recognition risks, auditors performed multiple procedures, including assessing internal controls, sampling customer orders and supporting documents (e.g., invoices, delivery records), conducting analytical reviews, and performing cutoff tests on transactions around the fiscal year-end[525](index=525&type=chunk)[527](index=527&type=chunk) [Consolidated Financial Statements](index=92&type=section&id=Consolidated%20financial%20statements) This section presents the Group's comprehensive financial statements, including the income statement, balance sheet, cash flow statement, and a five-year financial data summary [Consolidated Income Statement](index=92&type=section&id=Consolidated%20Income%20Statement) In FY2025, the Group's revenue was HKD 7.84 billion, up 11.7%, with gross profit at HKD 1.83 billion and gross margin improving to 23.4%; operating profit was HKD 536 million, and profit for the year increased 28.4% to HKD 184 million Consolidated Income Statement Key Data (HKD thousands) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | **Revenue** | 7,840,043 | 7,016,802 | | **Gross Profit** | 1,832,567 | 1,583,567 | | **Operating Profit** | 535,642 | 453,669 | | **Profit Before Income Tax** | 220,772 | 152,177 | | **Profit for the Year** | 183,891 | 143,175 | [Consolidated Balance Sheet](index=94&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, the Group's total assets were HKD 8.89 billion, total liabilities HKD 5.73 billion, and total equity HKD 3.16 billion, with non-current assets primarily property, plant, and equipment, and current assets dominated by inventories and trade receivables Consolidated Balance Sheet Overview (HKD thousands) | Item | March 31, 2025 (HKD thousands) | March 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | **Total Assets** | 8,894,096 | 8,602,750 | | Non-current Assets | 5,400,861 | 5,611,111 | | Current Assets | 3,493,235 | 2,991,639 | | **Total Liabilities** | 5,730,181 | 5,232,275 | | Non-current Liabilities | 3,803,586 | 3,730,404 | | Current Liabilities | 1,926,595 | 1,501,871 | | **Total Equity** | 3,163,915 | 3,370,475 | [Consolidated Statement of Cash Flows](index=97&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In FY2025, net cash from operating activities significantly increased to HKD 1.19 billion, while net cash used in investing activities was HKD 396 million and in financing activities was HKD 341 million, resulting in a net increase of HKD 457 million in cash and cash equivalents Consolidated Statement of Cash Flows Overview (HKD thousands) | Item | FY2025 (HKD thousands) | FY2024 (HKD thousands) | | :--- | :--- | :--- | | **Net Cash From Operating Activities** | 1,194,851 | 746,975 | | **Net Cash Used in Investing Activities** | (396,313) | (393,314) | | **Net Cash Used in Financing Activities** | (341,048) | (251,558) | | **Net Increase in Cash and Cash Equivalents** | 457,490 | 102,103 | | **Cash and Cash Equivalents at Year-End** | 907,831 | 623,117 | [Five-Year Financial Information Summary](index=186&type=section&id=Financial%20Information%20Summary) This report provides a summary of key financial data for the past five fiscal years (2021-2025), showing a rebound in revenue, gross profit, and profit attributable to owners in FY2025 after a dip in FY2024, with total assets and equity remaining relatively stable Five-Year Financial Performance Summary (HKD thousands) | Fiscal Year | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 7,840,043 | 7,016,802 | 7,879,287 | 8,346,728 | 5,974,290 | | **Gross Profit** | 1,832,567 | 1,583,567 | 1,902,111 | 2,045,440 | 1,237,953 | | **Profit Attributable to Owners** | 183,891 | 143,175 | 383,258 | 520,694 | 125,515 | | **Total Assets** | 8,894,096 | 8,602,750 | 8,682,290 | 9,419,772 | 8,737,036 | | **Total Equity** | 3,163,915 | 3,370,475 | 3,547,262 | 3,636,257 | 3,070,355 |

Core Viewpoint - The company reported FY25 results that met expectations, with significant growth in revenue and net profit, driven by strong performance in sports products and stable demand in the intimate apparel segment [1][2]. Financial Performance - FY25 revenue increased by 11.7% to HKD 7.84 billion, while net profit rose by 28.4% to HKD 180 million [1]. - In 2HFY25, revenue grew by 11.2% to HKD 3.86 billion, and net profit surged by 219.6% to HKD 120 million [1]. - The company declared a final dividend of HKD 0.043 per share, resulting in a total payout ratio of 45.3% for FY25 [1]. Segment Performance - Revenue from intimate apparel and sports products grew by 3.0% and 26.9% to HKD 4.24 billion and HKD 2.93 billion, respectively [2]. - Sports apparel saw nearly 50% growth in functional clothing categories, with revenue exceeding HKD 1.1 billion [2]. - Revenue from consumer electronics accessories increased by 43.2% to HKD 410 million, while revenue from cups and other accessories declined by 15.0% to HKD 250 million due to the cessation of footwear operations [2]. - Victoria's Secret revenue in China rose by 4.4% to HKD 1.97 billion, with e-commerce sales growing at a double-digit rate [2]. Profitability and Cost Management - Gross margin improved by 0.8 percentage points to 23.4% due to increased capacity utilization [3]. - Operating expenses remained stable, with sales, management, and R&D expense ratios increasing slightly by 0.1 percentage points each [3]. - The company incurred HKD 220 million in additional operating expenses due to the relocation of its domestic production base [3]. - Overall, net profit margin increased by 0.3 percentage points to 2.3% [3]. Future Outlook - The company expects high order visibility for 1HFY26, but the impact of U.S. tariff policies on consumer purchasing power remains uncertain for 2HFY26 [3]. - The intimate apparel segment is expected to remain stable, while sports products are anticipated to continue growing due to Bonding apparel [3]. - The company plans to implement cost-reduction measures, including decreased capital expenditures and debt management [3]. Earnings Forecast and Valuation - FY26 earnings forecast has been revised down by 27.8% to HKD 220 million, with FY27 earnings projected at HKD 360 million [3]. - The current stock price corresponds to a P/E ratio of 12x for FY26 and 7x for FY27, maintaining an outperform rating [3]. - The target price has been reduced by 21% to HKD 2.38, indicating a potential upside of 13.3% from the current stock price [3].

Company Overview - Virginie International (控股)有限公司 was founded in 1998 in Hong Kong and has rapidly developed into a leading global lingerie manufacturer within ten years, establishing a factory in Shenzhen, China [2] - The company has continuously pursued product development and technological advancements, showcasing its innovative capabilities and unique positioning as a design and manufacturing innovator [2] Financial Performance - As of March 31, 2025, Virginie reported total revenue of 7.235 billion HKD, representing a year-on-year growth of 11.73% [1] - The net profit attributable to shareholders was 170 million HKD, reflecting a year-on-year increase of 28.44% [1] - The company achieved a gross profit margin of 23.37% and had a debt-to-asset ratio of 64.43% [1] Stock Performance - As of June 27, the stock price of Virginie was 2.1 HKD per share, with a significant increase of 24.26% on that day, and a trading volume of 1.509 million shares [1] - Over the past month, Virginie has seen a cumulative increase of 1.2%, but has a year-to-date decline of 21.4%, underperforming the Hang Seng Index by 21.26% [1] - The current price-to-earnings (P/E) ratio for Virginie is 11.25, ranking 38th in the industry, while the average P/E ratio for the textile and apparel industry is -13.97 [1] Industry Context - The textile and apparel industry has an average P/E ratio (TTM) of -13.97, with a median of 0.37 [1] - Comparatively, other companies in the industry have varying P/E ratios, such as FAST RETAIL-DRS at 0.37, Zhejiang Yong'an at 1.34, and others ranging from 3.34 to 3.72 [1]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Overall Financial Performance](index=1&type=section&id=Financial%20Highlights%20Summary) For FY2025, the Group reported an 11.7% revenue increase to HKD 7.84 billion, a 15.7% rise in gross profit, and a 28.4% growth in profit attributable to owners of the Company to HKD 184 million, with adjusted net profit reaching HKD 402 million | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 7.84 billion | HKD 7.02 billion | +11.7% | | Gross Profit | HKD 1.83 billion | HKD 1.58 billion | +15.7% | | Gross Margin | 23.4% | 22.6% | +0.8pp | | Profit attributable to owners of the Company | HKD 184 million | HKD 143 million | +28.4% | | Adjusted Profit attributable to owners of the Company* | HKD 402 million | HKD 316 million | +27.1% | | Basic Earnings Per Share | 15.0 HK cents | 11.7 HK cents | +28.2% | | Total Annual Dividend Per Share | 6.8 HK cents | 5.7 HK cents | +19.3% | - Adjusted profit and adjusted EBITDA figures exclude the impact of special restructuring costs[4](index=4&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) In FY2025, the Group's revenue reached HKD 7.84 billion, an 11.7% year-on-year increase, with gross profit at HKD 1.83 billion, up 15.7%, and operating profit at HKD 536 million, up 18.1% due to increased expenses, resulting in a profit for the year of HKD 184 million, a 28.4% increase | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 7,840,043 | 7,016,802 | +11.7% | | Gross Profit | 1,832,567 | 1,583,567 | +15.7% | | Operating Profit | 535,642 | 453,669 | +18.1% | | Profit Before Income Tax | 220,772 | 152,177 | +45.1% | | Profit for the Year | 183,891 | 143,175 | +28.4% | [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, the Group's total assets increased 3.4% to HKD 8.89 billion, total liabilities grew 9.5% to HKD 5.73 billion primarily due to increased accrued expenses and other payables, while total equity slightly decreased | Item | March 31, 2025 (HKD Thousand) | March 31, 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 8,894,096 | 8,602,750 | +3.4% | | Total Liabilities | 5,730,181 | 5,232,275 | +9.5% | | Total Equity | 3,163,915 | 3,370,475 | -6.1% | - Current assets increased from **HKD 2.99 billion** to **HKD 3.49 billion**, primarily driven by an increase in cash and cash equivalents[7](index=7&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's business is divided into four segments: Intimate Wear, Sports Products, Consumer Electronics Accessories, and Bra Cups and Other Accessories Products, with Intimate Wear remaining the largest revenue source at 54.2% of total revenue, while Sports Products and Consumer Electronics Accessories achieved strong growth of 26.9% and 43.2% respectively, and the US remains the largest market, accounting for 43.8% of total revenue 2025 Fiscal Year Revenue and Gross Profit by Business Segment | Business Segment | Revenue (HKD Thousand) | Revenue Contribution | Gross Profit (HKD Thousand) | YoY Revenue Change | | :--- | :--- | :--- | :--- | :--- | | Intimate Wear | 4,243,404 | 54.2% | 1,047,215 | +3.0% | | Sports Products | 2,934,150 | 37.4% | 652,849 | +26.9% | | Consumer Electronics Accessories | 408,923 | 5.2% | 79,127 | +43.2% | | Bra Cups and Other Accessories Products | 253,566 | 3.2% | 53,376 | -15.0% | | **Total** | **7,840,043** | **100.0%** | **1,832,567** | **+11.7%** | Revenue by Customer Destination | Region | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | United States | 3,437,361 | 3,243,601 | +6.0% | | China | 1,533,869 | 1,383,477 | +10.9% | | Europe | 1,162,800 | 836,191 | +39.1% | | Japan | 527,575 | 454,311 | +16.1% | [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Market and Business Review](index=15&type=section&id=Market%20and%20Business%20Review) Facing global economic volatility, trade protectionism, and intensified industry competition, the Group focused on its IDM business model, achieving 11.7% revenue growth through technological innovation and production efficiency improvements, while effectively balancing regional risks by serving global markets from Vietnam and focusing on the domestic market from China, with the Victoria's Secret China joint venture achieving steady growth through localization - Despite the complex external environment, the Group achieved stable year-on-year revenue growth by dynamically adjusting strategies and optimizing its business structure[40](index=40&type=chunk) - The Group, guided by 'focusing on core business and strengthening main operations,' leveraged its IDM business model to enhance production efficiency through technological innovation, automation, and digitalization[41](index=41&type=chunk) - Victoria's Secret China continued to achieve steady growth exceeding the industry average, validating the success of its localization strategy, driven by brand value and differentiated products[41](index=41&type=chunk) [Business Segment Performance](index=16&type=section&id=Business%20Segment%20Performance) In FY2025, Sports Products and Consumer Electronics Accessories were key growth drivers with significant year-on-year revenue increases of 26.9% and 43.2% respectively, while Intimate Wear, the largest revenue source, saw a modest 3.0% growth, and Bra Cups and Other Accessories Products experienced a 15.0% revenue decline due to the cessation of footwear business [Intimate Wear](index=16&type=section&id=Intimate%20Wear) As the primary revenue source, Intimate Wear business revenue grew modestly by 3.0% year-on-year to HKD 4.24 billion, accounting for 54.2% of total revenue, with gross margin increasing by 1.0 percentage point to 24.7%, driven by significantly increased orders for innovative products developed for core brand partners | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | HKD 4.24 billion | HKD 4.12 billion | | Revenue Contribution | 54.2% | 58.7% | | Gross Profit | HKD 1.05 billion | HKD 977 million | | Gross Margin | 24.7% | 23.7% | [Sports Products](index=17&type=section&id=Sports%20Products) Sports Products business revenue significantly increased by 26.9% year-on-year to HKD 2.93 billion, representing 37.4% of total revenue, primarily driven by double-digit growth in sports bras and strong demand for differentiated functional apparel developed using proprietary Bonding technology | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | HKD 2.93 billion | HKD 2.31 billion | | Revenue Contribution | 37.4% | 32.9% | | Gross Profit | HKD 653 million | HKD 494 million | | Gross Margin | 22.3% | 21.4% | [Consumer Electronics Accessories](index=17&type=section&id=Consumer%20Electronics%20Accessories) Consumer Electronics Accessories business revenue significantly grew by 43.2% year-on-year to HKD 409 million, accounting for 5.2% of total revenue, primarily driven by new product orders from core brand partners in the first half of the year, with a slowdown in the second half | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | HKD 409 million | HKD 286 million | | Revenue Contribution | 5.2% | 4.1% | | Gross Profit | HKD 79 million | HKD 53 million | | Gross Margin | 19.4% | 18.5% | [Victoria's Secret China](index=18&type=section&id=Victoria's%20Secret%20China) The Victoria's Secret China joint venture achieved HKD 1.97 billion in revenue in FY2025, a 4.4% year-on-year increase, and recorded a net profit of HKD 85.6 million, with its localized innovation strategy driving double-digit year-on-year growth in related IDM businesses for the Group | Metric | FY2025 | YoY Change | | :--- | :--- | :--- | | Revenue | HKD 1.97 billion | +4.4% | | Net Profit | HKD 85.6 million | +0.2% | [Production Capacity and Operations](index=18&type=section&id=Production%20Capacity%20and%20Operations) The Group continues to optimize its production capacity layout, with the Shenzhen factory fully relocated to Zhaoqing to support the 'China for China' strategy, while the Vietnam base remains central to meeting international brand demands, accounting for 85% of the Group's total revenue, and as of March 31, 2025, Vietnam and mainland China employed approximately 31,900 and 4,900 employees respectively - The Shenzhen factory was fully relocated to the Zhaoqing base in October 2024, strengthening the technological linkage between local innovation and production[52](index=52&type=chunk) - In FY2025, the total production value from the Vietnam base accounted for **85%** of the Group's total revenue, reflecting its core position in the global supply chain[52](index=52&type=chunk) - The Group will rely on its Vietnam factories to meet international market demand and its Zhaoqing factories to support brand partners' 'China for China' initiatives, establishing a dual-track production model[53](index=53&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) As of March 31, 2025, the Group's net debt was HKD 3.33 billion, with a net gearing ratio of 105.2%, remaining largely stable, while trade receivables and payables turnover days were maintained at a healthy 48 and 25 days respectively, and capital expenditure for the year was approximately HKD 430 million, primarily for adding production lines and constructing production facilities | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Debt | HKD 3.33 billion | HKD 3.53 billion | | Net Gearing Ratio | 105.2% | 104.7% | | Trade Receivables Turnover Days | 48 days | 45 days | | Trade Payables Turnover Days | 25 days | 25 days | - Total capital expenditure for FY2025 was approximately **HKD 431 million**, a decrease from HKD 688 million in the previous year[77](index=77&type=chunk) [Future Outlook and Strategy](index=25&type=section&id=Future%20Outlook%20and%20Strategy) Looking ahead, in response to market uncertainties, the Group will adhere to the principle of 'cost reduction and control, efficiency-driven transformation, and debt reduction,' focusing on leveraging its leading Bonding technology, deepening upstream collaboration, expanding into diversified markets like China, Europe, and Japan to mitigate risks, and actively fulfilling ESG responsibilities by setting science-based carbon reduction targets - The core principle is 'cost reduction and control, efficiency-driven transformation, and debt reduction,' aiming to enhance profitability and optimize capital structure[86](index=86&type=chunk) - The Group will fully leverage its leading advantage in Bonding technology, replicating its success from intimate wear and sports businesses to a broader range of apparel businesses[87](index=87&type=chunk) - To address challenges such as tariff trade wars, the Group will consolidate mature markets while accelerating expansion into diversified markets like China, Europe, and Japan to enhance resilience against risks[88](index=88&type=chunk) - The Group has initiated the Science Based Targets initiative (SBTi) and plans to complete the formulation of carbon reduction targets aligned with the Paris Agreement within the next one to two years[89](index=89&type=chunk) [Corporate Governance and Other Matters](index=27&type=section&id=Corporate%20Governance%20and%20Other%20Matters) [Dividend Policy](index=28&type=section&id=Dividend) The Board recommends a final dividend of HKD 4.3 cents per share for the year ended March 31, 2025, bringing the total annual dividend to HKD 6.8 cents per share, which represents 45.3% of the net profit for the year, consistent with the policy of distributing no less than 30% of the financial year's net profit | Dividend Type | Amount Per Share (HK cents) | | :--- | :--- | | Interim Dividend | 2.5 | | Proposed Final Dividend | 4.3 | | **Total Annual Dividend** | **6.8** | - The proposed final dividend is subject to shareholders' approval at the Annual General Meeting on September 4, 2025[44](index=44&type=chunk)[100](index=100&type=chunk) [Proposed Corporate Actions](index=29&type=section&id=Proposed%20Corporate%20Actions) To comply with new regulatory requirements and company development needs, the Board proposes adopting new Articles of Association to reflect changes such as the paperless listing regime and electronic general meetings, and also recommends terminating the existing share option scheme, which expires in October 2025, and adopting a new '2025 Share Option Scheme' to continue incentivizing and rewarding contributors to the Group, with all related matters subject to approval at the Annual General Meeting - It is proposed to amend the existing Articles of Association to adopt new Third Amended and Restated Articles of Association to reflect systems such as paperless listing, electronic meetings, and new treasury shares[103](index=103&type=chunk)[105](index=105&type=chunk) - As the 2015 Share Option Scheme will expire on October 7, 2025, and no share options have ever been granted under it, the Board recommends terminating the scheme[106](index=106&type=chunk) - It is proposed to adopt a new '2025 Share Option Scheme' to enable the Group to continue incentivizing and rewarding eligible persons, aligning their interests with those of the Company[107](index=107&type=chunk)

Core Viewpoint - The lingerie industry is facing significant challenges as a growing number of women, particularly those born after 1995, are opting to forgo bras, which is reshaping consumer preferences and impacting sales across the sector [2][10]. Industry Overview - The lingerie market is experiencing a downturn, with major companies reporting declining sales and profits. In 2024, five leading publicly listed companies in the industry saw a comprehensive decline in their lingerie business, with two A-share companies experiencing a halving of their performance [5][9]. - Aimer, one of the A-share companies, reported a revenue of 3.163 billion yuan, a decrease of 7.71% year-on-year, and a net profit of 163 million yuan, down 46.56% [6]. - Huijie Co., known as the "first A-share lingerie stock," saw a slight revenue increase of 0.85% to 2.95 billion yuan, but its net profit plummeted by 56.54% to 79.04 million yuan, indicating that its core bra business is struggling [8]. Consumer Behavior Changes - A significant shift in consumer preferences is noted, with comfort becoming the primary concern for lingerie buyers, as 32% of users prioritize comfort over other factors [12]. - Many consumers are increasingly opting for alternatives to traditional bras, such as silicone pasties, to avoid discomfort while still addressing concerns about visibility [14]. - Social media platforms are amplifying this trend, with discussions around the discomfort of wearing bras gaining traction, leading to a cultural shift where not wearing a bra is becoming more accepted [15]. Market Dynamics - The lingerie industry is facing intensified competition from lower-priced brands, which is undermining the pricing strategies of mid-to-high-end brands [9][21]. - The overall economic downturn and sluggish consumer spending are contributing to the industry's challenges, making it difficult for brands to maintain profitability [10][21]. Future Outlook - The lingerie industry must adapt to these changing consumer preferences and address the comfort and fit issues that have been highlighted by consumers. Brands need to innovate and enhance their offerings to meet the evolving demands of the market [20][21].

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 3,977,617 thousand, representing a 12.2% increase from HKD 3,544,797 thousand in the same period of 2023[3] - Gross profit for the same period was HKD 938,017 thousand, with a gross margin of 23.6%, compared to HKD 842,710 thousand and a margin of 23.8% in 2023[3] - Profit attributable to the company's owners was HKD 67,619 thousand, an increase of 86.0% from HKD 36,352 thousand in the previous period[3] - Adjusted profit attributable to the company's owners was HKD 203,188 thousand, with an adjusted EBITDA of HKD 642,640 thousand, compared to HKD 196,574 thousand and HKD 645,976 thousand respectively in 2023[3] - The company reported a net profit of HKD 67,619,000 for the six months ended September 30, 2024, down from HKD 106,823,000 in the same period of 2023, indicating a decline of approximately 36.7%[29] - The adjusted net profit for the period was approximately HKD 203.2 million, reflecting a year-on-year increase of 3.4%[68] - Net profit for the first half of FY2025 was approximately HKD 67.6 million, a decrease of 36.7% from FY2024's first half, but an increase of 86.0% compared to HKD 36.4 million in the second half of FY2024[105] Expenses and Costs - Research and development expenses increased to HKD 154,092 thousand from HKD 128,663 thousand, reflecting a focus on innovation[7] - The company’s total distribution and selling expenses for the six months ended September 30, 2024, were HKD 84,273,000, compared to HKD 77,578,000 in the same period of 2023, indicating an increase of approximately 8.9%[29] - General and administrative expenses rose from approximately HKD 269.0 million in the first half of fiscal year 2024 to approximately HKD 324.3 million in the first half of fiscal year 2025, with the percentage of total revenue increasing from 7.6% to 8.2%[95] - Special relocation costs incurred in the first half of fiscal year 2025 amounted to approximately HKD 127.2 million, compared to HKD 90.3 million in the first half of fiscal year 2024, including employee compensation and fixed asset write-offs[98] - Financial cost for the first half of FY2025 increased to approximately HKD 173.6 million, representing 4.4% of total revenue, up from HKD 154.7 million in FY2024[100] Assets and Liabilities - Total assets as of September 30, 2024, were HKD 9,062,099 thousand, up from HKD 8,602,750 thousand as of March 31, 2024[9] - Total liabilities increased to HKD 5,579,106,000 as of September 30, 2024, compared to HKD 5,232,275,000 as of March 31, 2024, representing an increase of approximately 6.63%[11] - Current liabilities rose to HKD 1,877,280,000 from HKD 1,501,871,000, marking an increase of about 25.00%[11] - Non-current liabilities slightly decreased to HKD 3,701,826,000 from HKD 3,730,404,000, a decrease of approximately 0.76%[11] - Trade receivables as of September 30, 2024, amounted to HKD 1,106,951,000, compared to HKD 1,027,483,000 as of March 31, 2024[53] Market and Segment Performance - The company operates in four segments: intimate apparel, sports products, consumer electronics accessories, and cups and other accessories[23] - The intimate apparel segment generated approximately HKD 2,248.2 million in revenue, a year-on-year increase of 1.7%, accounting for 56.5% of total revenue, with a gross profit of HKD 552.0 million and a gross margin of 24.6%[70] - The sports products segment saw revenue rise to approximately HKD 1,327.0 million, a 33.5% increase year-on-year, representing 33.4% of total revenue, with a gross profit of HKD 303.2 million and a gross margin of 22.9%[73] - The consumer electronics accessories segment reported revenue of approximately HKD 243.8 million, up 52.1% year-on-year, contributing 6.1% to total revenue, with a gross profit of HKD 48.6 million and a gross margin of 20.0%[75] - Victoria's Secret China generated revenue of HKD 885.7 million, a slight increase of 0.3% year-on-year, with a net profit of HKD 18.1 million, facing pressure from weak consumer sentiment[78] Future Outlook and Strategy - The company continues to explore market expansion opportunities and new product development strategies to drive future growth[5] - The group anticipates a low-teens level year-on-year revenue growth for the fiscal year 2025, driven by a recovery in order visibility and production capacity[124] - The intimate apparel segment is expected to achieve low single-digit year-on-year revenue growth in fiscal year 2025, focusing on expanding shapewear offerings and collaborating with emerging quality brands[124] - The sports products segment is projected to achieve double-digit year-on-year revenue growth in fiscal year 2025, supported by product innovation and the rapid development of the Bonding apparel business[125] - The consumer electronics accessories segment is expected to show significant improvement in performance for fiscal year 2025, driven by increased demand for VR products and new product launches from major brand partners[125] Corporate Governance and Compliance - The company has not adopted any new or revised standards that would have a significant impact on its performance and financial position[21] - The company has appointed Mr. Hong Youli (also known as Hong Youyi) as both Chairman and CEO, believing this will enhance the efficiency and effectiveness of business strategy formulation and execution[145] - The board consists of five executive directors and three independent non-executive directors, ensuring a high level of independence[145] - The audit committee, composed of three independent non-executive directors, is responsible for overseeing financial and accounting policies, risk management, and internal control systems[147] - The independent auditor has reviewed the interim financial results in accordance with the relevant standards, ensuring the integrity of financial reporting[148] Sustainability and Social Responsibility - The company has achieved recognition for its long-term investments in sustainable development, including the completion of the first stage qualification verification for its carbon reduction targets under the Science Based Targets initiative (SBTi)[135] - The company emphasizes the importance of environmental, social, and governance (ESG) factors in driving sustainable development and has made progress in its four key areas of sustainable development agenda[132] - The company has completed the installation of solar power generation modules at its Vietnam C plant and plans to install solar facilities at its Xing'an and Zhaoqing production bases in the second half of the fiscal year and next year[133]

Financial Performance - Revenue for the year ended March 31, 2024, was HK$7,016,802, a decrease of 10.9% from HK$7,879,287 in 2023[21]. - Gross profit decreased by 16.7% to HK$1,583,567, representing 22.6% of revenue, compared to 24.1% in the previous year[21]. - Profit attributable to owners of the Company fell by 62.6% to HK$143,175, down from HK$383,258 in 2023[21]. - Adjusted profit attributable to owners of the Company decreased by 24.2% to HK$316,471, compared to HK$417,387 in the prior year[21]. - Earnings per share decreased to 11.7 HK cents from 31.3 HK cents in 2023[21]. - The Group recorded revenue of approximately HK$7,016.8 million for Fiscal 2024, representing a year-on-year decrease of 10.9% from HK$7,879.3 million in Fiscal 2023[61]. - Net profit for Fiscal 2024 was approximately HK$143.2 million, a decrease of 62.6% year-on-year, with a net profit margin of 2.0%, down 2.9 percentage points from 4.9% in Fiscal 2023[61]. - Adjusted EBITDA decreased by 11.8% to approximately HK$1,185.3 million, with an adjusted EBITDA margin of 16.9%, down 0.2 percentage points from 17.1% in Fiscal 2023[62]. - The total revenue decreased by 10.9% from approximately HK$7,879.3 million in Fiscal 2023 to approximately HK$7,016.8 million in Fiscal 2024[100]. - The Group's net current assets amounted to approximately HK$1,489.8 million as of March 31, 2024, down from HK$1,585.6 million in Fiscal 2023[63]. - The Group's net debt increased to approximately HK$3,530.5 million as of 31 March 2024, up from HK$3,283.5 million as of 31 March 2023, resulting in a net gearing ratio of 104.7%[143][145]. Production and Operations - The Group has established production bases in China and Vietnam to support domestic market growth and export business expansion[3]. - The major production base in Vietnam has been operational since 2016, supporting the growth of the export business[3]. - The company emphasized the importance of cost management and control, achieving record-high production efficiency at its Vietnam facilities[39]. - The Group's production efficiency reached record highs in its core business segments during Fiscal 2024, with plans to resume recruitment in Vietnam as orders recover[91]. - The relocation of production lines for consumer electronics and other products was completed during Fiscal 2024, with further adjustments expected to accommodate order deliveries[96]. - The new Zhaoqing production base is designed to meet world-leading standards, incorporating automated production lines and advanced information management systems to enhance production efficiency[187]. - The Zhaoqing production base will support the Group's growing business in the PRC and assist international brands in developing the local market[189]. - The Group aims to reduce manpower by 20% while maintaining the same production value to improve personnel productivity and reflect innovation advantages in gross profit margin growth[193]. Sustainability and Social Responsibility - Regina Miracle has set four sustainability goals for 2030, focusing on carbon reduction, waste management, sustainable innovation, and community development[4]. - The Group's commitment to social responsibility aligns with the United Nations' 2030 Sustainable Development Goals[4]. - The Group has made significant progress in carbon reduction, waste management, innovative development, talent nurturing, and community engagement over the past year[200]. - The establishment of a comprehensive governance framework for ESG has improved decision-making and implementation efficiency within the Group[200]. - The Group actively promotes sustainable development strategies and integrates environmental and social responsibility into its management practices[200]. - The recognition received by the Group serves as validation of its commitment to meeting the expectations of international brands for green production[200]. - The Group's efforts in sustainability have positioned it favorably in the competitive landscape of the manufacturing sector[200]. - The Group's initiatives in diversity, equality, and inclusion have been acknowledged, marking a significant milestone in its corporate social responsibility efforts[200]. Market and Business Strategy - The company focused on prioritizing core businesses and bolstering principal operations, particularly in intimate wear and sports products[31]. - The company is prioritizing core segments and strengthening core operations to navigate uncertainties in the macro environment, focusing on restructuring and development opportunities[56]. - The joint venture with Victoria's Secret has positively impacted the company's business in the Chinese market, providing valuable experience for collaboration with more brands[58]. - The Group will continue to prioritize core businesses, particularly intimate wear and sports products, to solidify its market position and stability[176]. - The Group anticipates a recovery in order demand in Fiscal 2025, leading to a rebound in total revenue[172]. - Revenue from the intimate wear segment is expected to grow at a low-to-mid single-digit rate due to recovering orders from major brand partners[173]. - The sports products segment is projected to achieve double-digit revenue growth, driven by steady recovery in sports bras and mid-double-digit growth in bonding apparel[173]. - The Group's bonding apparel business is recognized by target brand partners, with accelerating order growth and potential for significant market expansion[181]. - Orders for Santoni seamless related products recorded double-digit growth, indicating effective breakthroughs in product R&D and sales expansion[182]. - The Group has successfully introduced several products developed for the PRC market to overseas markets, creating new growth opportunities for its IDM business[200]. Research and Development - Regina Miracle's innovative design manufacturer (IDM) business model leverages three core technologies: computer-aided mold design, 3D compression molding, and seamless bonding[2]. - New patented bonding craftsmanship is expected to drive business breakthroughs and expand product categories[38]. - The company is focusing on technology upgrades centered around the patented bonding process, which has a market lead of 5 to 10 years, enhancing product quality and production efficiency[41]. - The Group has made significant progress in the development of Bonding technology, achieving a market lead of 5 to 10 years and identifying increasing demand for Bonding apparel products[183]. - The Santoni seamless product line recorded double-digit order growth, with expectations for continued growth in the coming year[184]. Financial Management - The company plans to reduce finance costs by actively reducing debt and optimizing the existing debt structure from Fiscal 2026 to 2028, aiming to lower the net gearing ratio to a healthy level[44]. - General and administrative expenses as a percentage of total revenue decreased from 8.9% in Fiscal 2023 to 8.0% in Fiscal 2024, attributed to operational streamlining and exchange gains[124]. - Research and development costs increased from approximately HK$235.8 million in Fiscal 2023 to approximately HK$267.5 million in Fiscal 2024, representing 3.8% of total revenue[126]. - Finance costs rose from approximately HK$293.5 million in Fiscal 2023 to approximately HK$337.0 million in Fiscal 2024, with the percentage of total revenue increasing from 3.7% to 4.8%[133].

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Insights - The report highlights a significant recovery in revenue from sports products, driven by the company's streamlined operations and improved production efficiency [3]. - The company is well-positioned to capitalize on industry consolidation and supply chain optimization opportunities, particularly with its main production base in Vietnam [3]. - The report anticipates a rebound in orders for sports products starting from the fourth quarter of FY2024, with a notable recovery trend observed in the second half of the fiscal year [3]. Summary by Sections Business Overview - The company has initiated a new round of recruitment for its international high-tech industrial park project in Zhaoqing, which integrates product R&D, manufacturing, and sales [2]. - The relocation of the Shenzhen production base to Zhaoqing is progressing well, with production lines for consumer electronics accessories, cups, and molded products completed by FY2024 [2]. Financial Performance - For FY2024, the company reported revenues of HKD 7.017 billion, a decrease of 11% year-on-year, with net profit dropping by 63% to HKD 143 million [6]. - The revenue breakdown shows a decline in various product categories, with intimate apparel and sports products experiencing a decrease of 6.9% and 5.1% respectively [3]. - The company’s gross margin decreased by 1.5 percentage points to 22.6%, while the net profit margin fell by 2.9 percentage points to 2% [5]. Future Projections - The report forecasts revenues of HKD 8.062 billion, HKD 9.038 billion, and HKD 9.956 billion for FY2025, FY2026, and FY2027 respectively, with corresponding net profits of HKD 200 million, HKD 304 million, and HKD 399 million [6][7]. - The expected P/E ratios for the upcoming years are projected to decrease from 20.4 in FY2024 to 7.3 by FY2027, indicating a potential increase in valuation attractiveness [6][7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][27]. Core Views - The company is expected to see improved orders in FY2024H2, with growth anticipated in the seamless clothing category [10][27]. - Despite a decline in revenue and net profit in FY2024, the company is projected to recover with a focus on core technology and product expansion [27][23]. Summary by Sections FY2024 Performance Overview - The company reported FY2024 revenue of HKD 70.17 billion, a decrease of 10.9%, and a net profit of HKD 1.43 billion, down 62.6% [10][11]. - FY2024H1 revenue was HKD 35.45 billion (-23.16%), while FY2024H2 revenue improved to HKD 34.72 billion (+6.31%) [10][11]. Profitability Analysis - The overall gross margin for FY2024 was 22.6%, down 1.5 percentage points, primarily due to reduced revenue leading to operational deleveraging [13][16]. - The net profit margin for FY2024 was 2.04%, a decline of 2.82 percentage points, attributed to sales decline and increased restructuring and financial costs [16][13]. Product Innovation and Market Strategy - The company is focusing on differentiated product innovation, with expectations for mid-single-digit growth in intimate apparel and double-digit growth in bonding clothing [23][24]. - The company aims to deepen its market presence in China, with sales in the Chinese market increasing from HKD 13.54 billion to HKD 13.83 billion from FY2022 to FY2024 [24][25]. Financial Forecast and Investment Recommendations - The company has adjusted its profit forecasts for FY2025-2027, predicting net profits of HKD 1.9 billion, HKD 3.0 billion, and HKD 5.5 billion respectively [27]. - The current stock price corresponds to a P/E ratio of 15.2 for FY2025, indicating potential for growth as the company recovers from recent challenges [27][7].