Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][6][48] Core Insights - The company is a global leader in garment manufacturing, providing comprehensive production solutions for renowned brands since its establishment in 1970 [1][11] - The company has shown steady improvement in profitability, with a compound annual growth rate (CAGR) of 0.24% in revenue and 5.64% in net profit from 2019 to 2024, indicating a recovery phase in 2024 [2][19] - The company has adopted a co-creation business model, enhancing collaboration with high-quality clients and providing value-added services [3][31] Summary by Sections Company Overview - The company operates approximately 20 modern factories across five countries, employing nearly 80,000 people and producing over 470 million garments annually [1][11] - It has established long-term partnerships with major brands like UNIQLO, UA, and Levi's, contributing to its industry-leading position [1][11] Financial Performance - In 2024, the company achieved total revenue of $2.47 billion, a year-on-year increase of 11.8%, and a net profit of $200 million, up 22.7% [2][19] - The gross margin and net margin have shown stability, with gross margin at 19.7% and net margin at 8.1% in 2024, reflecting effective cost control and operational efficiency [22][24] Co-Creation Business Model - The co-creation model allows the company to provide comprehensive services from market trend analysis to logistics, enhancing product development speed and reducing costs [3][31][32] - This model has led to successful product innovations, such as seamless bras and hybrid garments, which have become bestsellers [37][38] 2025 Outlook - The company is optimistic about achieving significant performance breakthroughs in 2025, supported by strong demand from core clients and planned capacity expansions [4][42][43] - Revenue projections for 2025-2027 are $2.74 billion, $3.01 billion, and $3.30 billion, with net profits expected to reach $230 million, $270 million, and $310 million respectively [5][44][46] Valuation and Estimates - The report estimates a target price of HKD 7.60 based on a 12x price-to-earnings (PE) ratio, translating to a market capitalization of HKD 21.7 billion [5][48]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][6][48] Core Views - The company is a global leader in garment manufacturing, providing comprehensive production solutions for renowned brands since its establishment in 1970 [1][11] - The company has shown steady improvement in profitability, with a compound annual growth rate (CAGR) of 0.24% in revenue and 5.64% in net profit from 2019 to 2024, indicating a recovery phase in 2024 [2][19] - The company has adopted a co-creation business model, enhancing collaboration with high-quality clients and providing value-added services [3][31] Summary by Sections Company Overview - The company operates approximately 20 modern factories across five countries, employing nearly 80,000 people and producing over 470 million garments annually [1][11] - It has established long-term partnerships with major brands like UNIQLO, UA, and Levi's, contributing to its industry-leading position [1][11] Financial Performance - In 2024, the company achieved total revenue of $2.47 billion, a year-on-year increase of 11.8%, and a net profit of $200 million, up 22.7% [2][19] - The gross margin improved from 19.1% in 2019 to 19.7% in 2024, while the net margin increased from 6.2% to 8.1% during the same period [22][24] Co-Creation Business Model - The co-creation model allows the company to provide comprehensive services from market trend analysis to logistics, enhancing product development efficiency [3][31] - This model has led to significant advantages, such as reduced product development time and lower raw material costs [32][36] 2025 Outlook - The company is optimistic about achieving significant performance breakthroughs in 2025, supported by strong demand from core clients [4][42] - It plans to expand production capacity in mid-2024 to meet increasing order volumes, with a focus on maintaining strict cost control [4][43] Revenue and Valuation Forecast - Revenue projections for 2025-2027 are $2.74 billion, $3.01 billion, and $3.30 billion, respectively, with net profits expected to be $230 million, $270 million, and $310 million [5][44][46] - The target price is set at HKD 7.60, based on a 12x price-to-earnings ratio [5][48]

Financial Performance - For the fiscal year ending December 31, 2024, the revenue was $2,470 million, an increase of 13.5% compared to $2,177 million in 2023[4] - The net profit for the fiscal year was $201 million, up from $164 million in 2023, representing a growth of 22.6%[4] - Gross profit for the year was $486 million, reflecting a gross margin of approximately 19.7%, compared to $418 million in 2023[5] - The operating profit before tax was $248 million, an increase of 27.2% from $195 million in the previous year[5] - The company reported a total comprehensive income of $194 million for the year, compared to $155 million in 2023, marking a growth of 25.0%[6] - Basic earnings per share increased to $0.0703 from $0.0573 in 2023, representing a growth of 22.0%[6] - The group achieved a 22% increase in net profit to $201 million in 2024, compared to $164 million in 2023[54] - The gross margin improved to 19.7% in 2024, up from 19.2% in 2023, while the net profit margin increased to 8.1% from 7.5%[54] Dividends - The proposed final dividend is HKD 0.19 per share (approximately USD 0.024), with a total dividend of HKD 0.383 per share for the year, compared to HKD 0.180 in 2023[4] - The company plans to celebrate its 55th anniversary with a special dividend of HKD 0.055 per share[4] - The proposed final dividend for the year ended December 31, 2024, is 19.0 HKD per share, compared to 13.0 HKD per share in 2023, which is an increase of approximately 46.2%[37] - The company has proposed a special dividend of 5.5 HKD per share, totaling approximately 156,905,000 HKD (about 20,209,000 USD), which was not paid in the previous year[36] - The company's mid-term dividend for the year ended December 31, 2024, was 13.8 HKD per share, significantly higher than 5.0 HKD per share in 2023, reflecting an increase of approximately 176%[36] Revenue Sources - Revenue from external sales reached $2,469,629 thousand in 2024, with significant contributions from sportswear ($694,237 thousand) and casual wear ($554,603 thousand)[20] - Revenue from major customer A increased to $898,614,000 in 2024 from $712,836,000 in 2023, representing a growth of approximately 26%[24] - Revenue from the Asia-Pacific region was $982,088,000 in 2024, up from $877,298,000 in 2023, indicating a growth of about 11.9%[25] - North America revenue also saw an increase to $942,461,000 in 2024 from $843,110,000 in 2023, reflecting a growth of approximately 11.8%[25] Costs and Expenses - The total sales cost for the year was $1,983 million, which is an increase from $1,760 million in 2023, indicating a rise in operational costs[5] - Total employee costs rose to $594,998,000 in 2024 from $516,743,000 in 2023, marking an increase of about 15.1%[29] - Income tax expenses for the year totaled $49,678,000, compared to $36,637,000 in the previous year, indicating an increase of approximately 35.5%[31] - Sales and distribution expenses remained stable at 1.6% of revenue in 2024, compared to 1.2% in 2023[65] - Administrative and R&D expenses as a percentage of revenue decreased to 7.4% in 2024 from 8.5% in 2023, reflecting effective cost-saving measures[67] Assets and Liabilities - Total assets increased to $2,254,453 thousand in 2024 from $1,974,562 thousand in 2023, representing a growth of approximately 14.2%[8] - Current assets rose to $1,360,337 thousand in 2024, up from $1,135,020 thousand in 2023, indicating an increase of about 19.9%[8] - Total equity increased to $1,535,446 thousand in 2024, compared to $1,438,902 thousand in 2023, reflecting a growth of approximately 6.7%[10] - The total amount of trade and other payables increased to $478,046,000 in 2024 from $380,969,000 in 2023, marking a rise of approximately 25.5%[44] - The company's trade payables as of December 31, 2024, were $176,404,000, compared to $125,496,000 in 2023, representing an increase of approximately 40.6%[44] Research and Development - Research and development expenses remained stable at $32 million, slightly increasing from $32 million in 2023[5] - The company incurred research and development expenses of $32,441 thousand in 2024, highlighting its commitment to innovation[20] Future Outlook - The group is confident in achieving strong performance in 2025, driven by core customers that include influential leading apparel brands, aiming to enhance market penetration[82] - The group plans to focus on sportswear, leisurewear, and fitted underwear in 2025, deepening collaboration with major brand customers[83] - The group anticipates sufficient production capacity to meet the increasing order volume in 2025, supported by a mid-2024 capacity expansion[83] - The group's profitability is expected to continue improving due to economies of scale from anticipated revenue growth, with a commitment to strict cost control[85] - Capital expenditure plans for 2025 will be similar to 2024, focusing on upgrading automation equipment and expanding apparel production capacity[86] Corporate Governance - The company adhered to the corporate governance code as per the Hong Kong Stock Exchange Listing Rules for the fiscal year ending December 31, 2024[91] - The board confirmed compliance with the standard code for securities trading by directors for the fiscal year ending December 31, 2024[92] - The audit committee reviewed the audited consolidated financial statements and expressed satisfaction with the accounting policies and financial judgments applied by the company[96] Sustainability Initiatives - The group expanded its solar photovoltaic capacity to 20 gigawatts in 2024, contributing to its sustainability goals[57] - The group received multiple awards for its sustainability achievements, including the "Best Sustainable Development Company" award from Ernst & Young[58]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is a leading global garment manufacturer with a diversified product range, including casual wear, denim, intimate apparel, knitwear, sportswear, and outdoor clothing. It has established a strong customer base and is expanding into the sports sector, which is expected to enhance growth potential [3][5][36]. - The company has a stable revenue and profit trajectory, with a projected increase in net profit from 1.41 billion RMB in 2024 to 1.95 billion RMB in 2026, reflecting a compound annual growth rate (CAGR) of 19% [1][15]. - The global apparel market is expected to grow steadily, with the sportswear segment projected to reach a retail market size of $407.42 billion by 2024, growing at a CAGR of 6.2% from 2014 to 2024 [26][28]. Company Overview - The company was founded in 1970 and is headquartered in Hong Kong, operating approximately 20 factories across Vietnam, China, Cambodia, Bangladesh, and Sri Lanka, with an annual production capacity exceeding 470 million pieces [5][6]. - The company has a concentrated ownership structure, with the founders holding 76.5% of the shares, ensuring stable control [12]. Financial Performance - In 2023, the company reported revenues of $2.177 billion, a decrease of 12.6% year-on-year, with a net profit of $164 million, down 5.3% year-on-year. However, the company is entering a recovery phase, with a projected revenue growth of 8.4% in the first half of 2024 [15][26]. - The company maintains a stable gross margin of around 19-20% since 2018, with net profit margins expected to improve due to operational efficiencies and cost control measures [16][20]. Industry Analysis - The global apparel industry is projected to reach a retail market size of $1.45 trillion by 2024, with a CAGR of 3.0% from 2014 to 2024. The sportswear segment is expected to grow significantly, indicating a favorable market environment for the company [26][28]. - The concentration of brands in the sportswear segment is significantly higher than in other categories, with the top 10 brands expected to account for 42.3% of the market by 2024 [28][31]. Strategic Focus - The company emphasizes a diversified product portfolio and a collaborative model with clients, enhancing customer loyalty and operational efficiency. It serves over 50 brands, including Uniqlo, H&M, and Gap, with a focus on expanding its sportswear client base [36][41]. - The company is actively pursuing vertical integration by acquiring upstream suppliers, which is expected to improve delivery capabilities and profitability [36][7].

Company and Industry Summary Company Overview - The company was established in 1970 and has over 50 years of industry experience, achieving multi-category coverage and diversified capacity layout [2] - The product categories include leisure wear, denim, intimate apparel, sweaters, and sports & outdoor wear, with significant milestones in product development over the years [2] Industry Dynamics - The company has shifted production capacity to Southeast Asia due to US-China trade tensions, with operations now in five countries: China, Vietnam, Cambodia, Bangladesh, and Sri Lanka [3] - The company has experienced four development phases since its IPO in 2017, with significant impacts from external factors such as trade policies and market demand [3][4] Financial Performance - The company’s PE ratio has fluctuated, with a low range of 4 to 7 times, and has shown recovery from 5 times to 10 times as market conditions improved [5] - Revenue and profit have shown growth from 2014 to 2023, with a notable increase in gross margin from 16.9% in 2014 to 19.2% in 2023 [10][11] - The company’s revenue from sports and outdoor categories has grown significantly, with a compound annual growth rate (CAGR) of 14% from 2017 to 2023 [9] Customer Relationships - The company has established long-term relationships with major clients such as Uniqlo, Levi's, and Victoria's Secret, contributing to stable revenue streams [14][15] - The top five customers account for approximately 60% of total revenue, indicating a concentrated customer base [18] Competitive Advantages - The company employs a unique co-creation model, enhancing customer engagement and loyalty by providing value-added services during product development [19] - The management team has a stable structure with significant industry experience, contributing to effective decision-making and operational efficiency [6][7] Growth Opportunities - Future growth is expected to be driven by the recovery of downstream apparel brand demand and the company’s ability to capture more orders through vertical integration and enhanced customer collaboration [25][26] - The company aims to increase its production efficiency through automation and advanced management practices, which are expected to improve profitability [24] Risks - The company faces risks related to its export-oriented business model, including potential delays in hiring local labor for production expansion [28] - Global economic fluctuations may impact demand for apparel brands, leading to reduced orders for manufacturing companies [28] Investment Recommendation - The company is recommended for strong buy due to its low valuation compared to historical levels and peers, with projected revenue growth of $200 million, $235 million, and $274 million for 2024 to 2026 [27]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Insights - The company, Crystal International, is positioned as a leading multi-category garment manufacturer, leveraging cross-research and production capabilities to meet downstream brand demands, continuously expanding its customer base and increasing its share among major clients, driving revenue growth beyond expectations [1] Summary by Sections Company Overview - Crystal International is a global leader in garment manufacturing with a diverse product matrix, deeply integrated with top global brand clients. Established in 1970 and listed in 2017, the company has an annual garment production capacity of 470 million pieces and reported revenues of $2.18 billion and a net profit of $160 million in 2023 [20][21] Market Outlook - The global apparel retail market is expected to see a compound annual growth rate (CAGR) of 5% from 2024 to 2028, following a period of stagnation from 2020 to 2023. The market size grew from $1.22 trillion in 2010 to $1.43 trillion in 2023, with a CAGR of 1.3% during this period [33][34] Company Growth Potential - The company is expected to achieve a compound annual growth rate (CAGR) of double digits over the next three years, with a projected dividend payout ratio of around 60%. This growth is supported by the expansion into sports and outdoor apparel, enhancing cross-category research capabilities, and a robust hiring strategy to increase production capacity [3][4] Financial Projections - Revenue forecasts for 2024-2026 are $2.47 billion, $2.81 billion, and $3.18 billion, respectively, with year-on-year growth rates of 13.5%, 13.8%, and 13.0%. Net profit is projected to be $198 million, $231 million, and $267 million for the same years, reflecting growth rates of 20.9%, 16.7%, and 15.6% [5] Competitive Landscape - The textile manufacturing industry is experiencing a shift towards Southeast Asia due to cost advantages and favorable trade agreements. The company holds a market share of approximately 0.4%, indicating significant room for growth as smaller manufacturers exit the market due to rising costs and stricter brand requirements [26][31] Catalysts for Growth - Potential catalysts for the company's growth include exceeding revenue expectations from major clients, continued hiring to saturate production capacity, and an increase in dividend rates [4]

Investment Rating - The report gives a "Buy" rating for the company with a target price of 5.77 HKD, based on a 9x PE multiple for 2025 [2][5] Core Views - The company is a global apparel manufacturing giant with nearly 50 years of industry experience, focusing on five core categories: casualwear, sportswear & outdoor wear, denim, intimate wear, and sweaters [1] - The global apparel manufacturing industry is expected to see increased market share for leading companies due to factors like rising quality demands, cost pressures, and trade frictions [1] - The company has a wide moat, including strong customer relationships, a global manufacturing platform, and excellent R&D capabilities supporting a co-creation business model [2] - Future growth is expected to be driven by vertical integration, automation, and reduced exposure to US-China trade risks [2] Financial Performance - Revenue is forecasted to grow from 2,476 million USD in 2024E to 3,167 million USD in 2026E, with a CAGR of 13.1% [3] - Net profit is expected to increase from 204 million USD in 2024E to 269 million USD in 2026E, with a CAGR of 14.8% [3] - EPS is projected to grow from 0.07 USD in 2024E to 0.09 USD in 2026E [3] Industry Analysis - The global apparel market has shown steady growth, with the sportswear segment growing at a higher rate (4.3% CAGR from 2010-2023) [66] - The apparel manufacturing industry is highly fragmented, with leading companies expected to gain market share due to vertical integration and cost advantages [66][68] - Companies with vertical integration capabilities tend to have better profitability due to cost control, faster response times, and stronger R&D capabilities [71] Competitive Advantages - The company has deep relationships with global apparel brands, with some partnerships spanning 10-30 years [91] - It has a global manufacturing footprint across Vietnam, China, Cambodia, Bangladesh, and Sri Lanka, with 82% of employees located overseas [103] - The company's co-creation model with customers enhances product innovation and strengthens customer relationships [90] - Cross-category sales have been effective in expanding business opportunities [90] Future Outlook - The company is advancing vertical integration and automation, with plans to establish a modern center in Vietnam for advanced equipment development by 2024 [2] - The proportion of US revenue has been declining, which is expected to further reduce trade friction risks [2] - The company's focus on sportswear and outdoor wear is expected to drive future growth, with this category's revenue share increasing from 10% in 2017 to 22% in 2023 [38]

Key Points Company Overview 1. **Company Name and Background**: Jingyuan International, established in 1970, has over 50 years of experience in garment manufacturing. It was listed in Hong Kong in 2017. The company's revenue in 2022 was $2.18 billion, with a net profit of $160 million. Jingyuan is the second-largest player in the global garment manufacturing industry, with a revenue volume second only to Shenzhen. [1] 2. **Product Categories**: Jingyuan offers a diverse range of products, including sweaters, leisurewear, denim, intimate wear, and sports and outdoor wear. [1] 3. **Customer Base**: Jingyuan serves a wide range of global fashion brands, including Uniqlo, Levi's, Gap, H&M, Adidas, Nike, LULU, UA, and Puma. [1] 4. **Global Manufacturing Presence**: Jingyuan has 23 factories in China, Vietnam, Bangladesh, Cambodia, and Sri Lanka, with a total workforce of 70,000, of which over 80% are overseas employees. [2] Financial Performance 1. **2023 H1 Revenue and Profit Growth**: Jingyuan's revenue and net profit for the first half of 2023 increased by 8.4% and 14.1%, respectively. This growth was driven by the recovery of orders from European and American brand customers and additional orders received on top of the original expectations. [3] 2. **Employee Expansion**: Jingyuan hired 5,000 employees in the first half of 2023 and plans to continue hiring in the second half. The total workforce is expected to reach 65,000 by the end of 2025. [3] 3. **Historical Performance**: Jingyuan's historical data shows a strong correlation between employee numbers and revenue scale. The company's gross margin has remained stable at 19-20% over the years, indicating strong operational control capabilities. [4] Future Outlook 1. **Order Growth**: Jingyuan's order growth is expected to be driven by two main factors: the continued growth of its largest customer, Uniqlo, and the rapid growth of the sports and outdoor wear category. [5] 2. **Uniqlo Collaboration**: Uniqlo, Jingyuan's largest customer, accounts for about one-third of its revenue. The two companies have a long-standing partnership, with a history of creating best-selling products together. [5] 3. **Sports and Outdoor Wear**: Jingyuan entered the sports and outdoor wear category in 2016 through acquisitions and has since entered into partnerships with major brands like Adidas, Nike, LULU, and UA. This category has seen a load growth of 14% from 2017 to 2023, becoming the second-largest category after leisurewear. [6] 4. **Other Categories**: Jingyuan's other categories, such as sweaters and denim, are also experiencing upward trends. [6] 5. **Revenue and Profit Projections**: Jingyuan is expected to achieve revenue of $2.47, $2.81, and $3.18 billion in 2024, 2025, and 2026, respectively, with corresponding net profits of $198 million, $231 million, and $267 million. [8]

Investment Rating - Buy rating (first coverage) [7] Core Views - Crystal International is a leading global apparel manufacturer with a diversified product portfolio and strong partnerships with top global brands [1][6] - The company has a robust global production layout, with 82% of its workforce located overseas, primarily in Vietnam [1][18] - Crystal International's revenue is expected to grow steadily, with projected revenues of $2.47B, $2.81B, and $3.18B for 2024-2026, representing a CAGR of 13.5%, 13.8%, and 13.0% respectively [3] - Net profit is forecasted to grow at a CAGR of 21%, 17%, and 16% for the same period, with a PE ratio of 8x, 7x, and 6x, significantly lower than industry peers [3] Product Portfolio - Crystal International offers a diversified product portfolio across five categories: casualwear (28%), sportswear & outdoor (22%), denim (21%), intimatewear (18%), and sweaters (10%) [1][17] - The company has deep partnerships with 7 out of the top 10 global apparel brands, including Uniqlo, Levi's, GAP, Victoria's Secret, Nike, and Adidas [1][17] - Sportswear & outdoor category has been a key growth driver since 2016, with a CAGR of 14.1% from 2017-2023 [31][32] Global Production Layout - Crystal International has 23 factories across 5 countries, with 82% of its workforce located overseas, primarily in Vietnam (49%) [1][18] - The company has been expanding its upstream fabric production through acquisitions and self-built factories since 2021, enhancing vertical integration and shortening delivery times [1][18] Financial Performance - Crystal International's revenue has fluctuated in recent years due to external factors, but is expected to recover in 2024 with H1 revenue and net profit growing by 8.4% and 14.1% YoY respectively [23][24] - Gross margin has remained stable at 19%-20%, with net margin steadily improving to 7%-8% in recent years [24][25] - The company has a strong dividend policy, with a payout ratio of 60% in H1 2024 and a projected full-year dividend yield of 7%+ [39][40] Industry Overview - The global apparel retail market is expected to grow at a CAGR of 5.3% from 2024-2028, with sportswear being the fastest-growing category at a CAGR of 6.2% [42][43] - The top 10 global apparel brands have increased their market share from 6.6% in 2014 to 9.9% in 2023, with 7 of them being Crystal International's clients [44][45] - The apparel manufacturing industry is highly fragmented, with Crystal International holding a 0.4% market share, second only to Shenzhou International's 0.7% [52][53] Competitive Advantages - Crystal International's "Co-creation" business model allows it to collaborate closely with clients on product design, material selection, and production planning, enabling faster time-to-market and higher success rates [64][68] - The company has a strong R&D focus, with annual R&D expenditures of $20-40M and a portfolio of 48 patents covering various production technologies [69][70] - Crystal International's diversified product portfolio and global production footprint give it a competitive edge over peers, allowing it to offer one-stop solutions to clients [58][59]

Financial Performance - Revenue for the six months ended June 30, 2024, was $1,093,672 thousand, an increase of 8.4% compared to $1,009,191 thousand in 2023[10] - Gross profit for the same period was $213,452 thousand, representing a gross margin of 19.5%, up from 19.1% in the previous year[10] - Net profit for the six months was $84,214 thousand, with a net profit margin of 7.7%, compared to 7.3% in 2023[10] - The company’s revenue for the six months ended June 30, 2024, increased by 8.4% to $1,094 million compared to $1,009 million for the same period in 2023[13] - Gross profit rose by 10.8% to $213 million, with a gross margin increase from 19.1% to 19.5% year-over-year[14] - Net profit increased by 13.6% to $84 million, with a net profit margin rising from 7.3% to 7.7%[22] - The total comprehensive income for the period was $76,382 thousand, compared to $66,531 thousand in the same period last year, reflecting a growth of 14.0%[61] - The profit before tax for the six months ended June 30, 2024, was $84,012,000, representing a 14.4% increase compared to $73,642,000 for the same period in 2023[93] Assets and Liabilities - Total assets increased to $2,058,896 thousand from $1,974,562 thousand year-on-year[10] - The company reported a total equity of $1.467 billion as of June 30, 2024, compared to $1.345 billion as of June 30, 2023[66] - The company’s total assets amounted to $1.438 billion as of June 30, 2024, compared to $1.345 billion as of June 30, 2023[66] - Trade receivables and other receivables rose to $183,621 thousand from $118,803 thousand, marking a significant increase of 54.6%[63] - The total amount of trade receivables classified at fair value through other comprehensive income was $190,220,000 as of June 30, 2024, compared to $164,491,000 as of December 31, 2023, reflecting an increase of 15.6%[99] Cash Flow and Capital Expenditures - The company reported a cash turnover period of 70 days, slightly up from 69 days in the previous year[10] - The operating cash flow for the first half of 2024 was $44 million, a decrease from $141 million in the same period of 2023[23] - The company invested $52 million in capital expenditures for the six months ended June 30, 2024, up from $33 million in the same period last year[14] - The total capital expenditure for property, plant, and equipment was approximately $29,600,000 for the six months ended June 30, 2024, compared to $16,089,000 in the same period of 2023[94] Market and Demand Trends - Demand for sports and outdoor apparel has surged, driving sales growth in functional and comfortable clothing[12] - The demand for denim has rebounded from pandemic lows, supported by fashion trends and innovative lightweight denim products[12] - Brand clients have resumed procurement, leading to improved operating conditions for OEMs, with a shift towards smaller, quicker orders to avoid inventory buildup[12] - The Asia-Pacific region accounted for 38.2% of total revenue, with sales of $418 million, while North America contributed 37.9% with $415 million[18] Sustainability and Corporate Governance - The company aims to achieve a 35% reduction in total greenhouse gas emissions by 2030 as part of its sustainability goals[29] - The company’s CDP climate change rating improved from B in 2022 to A in 2023, reflecting leadership in climate transition and emissions management[31] - The company has implemented a written risk assessment procedure to identify, assess, and manage significant risks, which the audit committee finds effective[54] - The board is committed to maintaining good corporate governance practices and has reviewed compliance with the corporate governance code[51] Employee and Operational Insights - Employee costs accounted for 25.7% of revenue in the first half of 2024, down from 26.6% in the same period of 2023[28] - The company has hired an additional 5,000 employees by the end of Q2, bringing the total workforce to 70,000[33] - The company faced production capacity constraints due to hiring difficulties in the first quarter, but has since improved staffing levels significantly in the second quarter[14] Dividends and Shareholder Information - The company plans to increase its dividend payout ratio to 60%, declaring an interim dividend of 13.8 HK cents per share, up from 5.0 HK cents in the previous year[15] - The company declared an interim dividend of HKD 0.138 per share, payable on September 20, 2024[35] Future Outlook and Strategic Initiatives - The company expects to benefit from economies of scale as production capacity increases in the second half of the year, leading to improved operational efficiency and profit margins[33] - The company is exploring potential acquisitions to bolster its product offerings, with a budget of $200 million allocated for this purpose[121] - A new strategic partnership was announced, expected to drive an additional $100 million in revenue over the next year[121]