SHENZHOU INTERNATIONAL GROUP HOLDINGS LIMITED 申洲國際集團控股有限公司* (incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立之有限公司） (Stock code 股份代號: 2313) Dear non-registered shareholder(s), Shenzhou International Group Holdings Limited (the "Company") – Notice of Publication of Interim Report (the "Current Corporate Communication") The Current Corporate Communication of the Company has been published in English and Chinese languages and are available on the website of the Company www.shenzhouintl.com ...

申洲國際集團控股有限公司* SHENZHOU INTERNATIONAL GROUP HOLDINGS LIMITED Pursuant to Rule 2.07A of the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited under the expansion of paperless listing regime and electronic dissemination of Corporate Communications that came into effect on 31 December 2023, the Company is writing to inform you that the Company has adopted electronic dissemination of Corporate Communications. Please note that both the English and Chinese versions of all future ...

Financial Performance - For the six months ended June 30, 2025, the company reported sales of RMB 14,966,384, an increase of 15.4% compared to RMB 12,975,971 in the same period of 2024[8]. - Gross profit for the same period was RMB 4,058,018, reflecting a gross margin of 27.1%, down from 29.0% in 2024[8]. - Profit attributable to equity holders of the parent company was RMB 3,176,836, representing a year-on-year increase of 8.4% from RMB 2,931,028[8]. - Revenue for the six months ended June 30, 2025, was RMB 14,966,384 thousand, an increase of 15.4% compared to RMB 12,975,971 thousand for the same period in 2024[47]. - Gross profit for the same period was RMB 4,058,018 thousand, up 7.9% from RMB 3,761,469 thousand in 2024[47]. - Net profit for the six months ended June 30, 2025, reached RMB 3,176,836 thousand, representing a 8.4% increase from RMB 2,931,028 thousand in 2024[49]. - Basic and diluted earnings per share for the period were RMB 2.11, compared to RMB 1.95 in the previous year, reflecting a 8.2% increase[47]. Assets and Liabilities - The company's total assets increased to RMB 56,177,197, up from RMB 53,107,848 as of December 31, 2024[8]. - The equity attributable to the owners of the parent company was approximately RMB 36,959,881,000, an increase from RMB 35,852,895,000 at the end of the previous year[30]. - Total liabilities as of June 30, 2025, were RMB 18,801,843 thousand, compared to RMB 16,826,163 thousand at the end of 2024, indicating a 11.7% increase[50]. - The debt-to-equity ratio as of June 30, 2025, was approximately 39.8%[41]. - The total bank borrowings amounted to approximately RMB 8,161,280,000, with USD loans around RMB 1,529,399,000 and HKD loans approximately RMB 6,631,881,000[37]. Market Performance - The company anticipates continued growth potential in the domestic market, driven by government policies to stimulate domestic demand[12]. - The global apparel consumption demand showed signs of recovery, although uncertainties from U.S. tariff policies impacted market share in the U.S.[12]. - International sales accounted for 75.6% of total sales, with significant growth in the U.S. market, which saw a 35.8% increase to RMB 2,554,890,000[26]. - Sales of sports products reached approximately RMB 10,128,586,000, a 9.9% increase from RMB 9,212,546,000, driven by rising demand in Europe and the United States[23]. - Sales in the European market reached approximately RMB 3,028,824,000, an increase of about RMB 501,899,000 or 19.9% compared to the same period last year[27]. Operational Efficiency - The average collection period for accounts receivable increased to 77 days from 71 days, suggesting a slower collection process[8]. - The inventory turnover period remained stable at 115 days, slightly down from 116 days[8]. - The company is upgrading domestic production capacity through equipment updates and process optimization to enhance product quality and reduce labor costs[18]. - The company has acquired approximately 7 hectares of new land in Anhui for a new automated garment factory, aimed at improving production efficiency[18]. Cash Flow and Investments - Net cash generated from operating activities was approximately RMB 2,692,920,000, an increase of about RMB 383,344,000 compared to the same period last year[31]. - The net cash flow from investing activities was negative at RMB (3,179,077), compared to RMB (982,969) in 2024, indicating increased investment outflows[57]. - Capital expenditures for the six months ended June 30, 2025, totaled approximately RMB 1,533,639,000, with about 23% allocated for production equipment and 74% for new factory construction[39]. Corporate Governance - The board has adopted a corporate governance code and has complied with all code provisions during the reporting period[117]. - The audit committee consists of four independent non-executive directors, responsible for reviewing financial practices and internal controls[129]. - The company has implemented a securities trading code to ensure compliance with trading restrictions for directors and senior management[123]. Shareholder Information - The company declared an interim dividend of HKD 1.38 per share for the six months ending June 30, 2025, compared to HKD 1.25 per share for the same period last year[113]. - Major shareholder "Xie Rong" holds 636,806,950 shares, representing 42.36% of the company's issued share capital[110]. - Mr. Ma Jianrong holds 638,096,650 shares, representing 42.45% of the company's issued share capital[106].

Core Viewpoint - The article focuses on the growth logic and investment value of Shenzhou International, emphasizing its unique profit structure and competitive advantages in the textile industry [4][6][28]. Group 1: Growth Logic - Shenzhou International has demonstrated a strong growth trajectory, supported by its ability to manage cost pressures across the textile supply chain, rather than solely relying on profit margins [4][6]. - The company has maintained a profit structure of approximately 30% gross margin and 20% net margin, significantly higher than industry peers, which typically operate at around 20% gross margin and 10% net margin [6][11]. - The vertical integration of its business model and a high proportion of sportswear clients have been key factors in sustaining its superior profit structure [11][12]. Group 2: Competitive Advantages - Shenzhou's early entry into upstream fabric production and its strategic focus on sportswear have created significant barriers to entry for competitors, such as Crystal International, which has struggled to replicate these advantages despite its long-standing presence in the industry [12][13]. - The company has effectively leveraged its relationships with major clients like Nike and Adidas, which account for a substantial portion of its revenue, to enhance its market position [24][25]. - Shenzhou's ability to internalize cost pressures and improve operational efficiency has allowed it to maintain competitive pricing, which is attractive to brand clients [25][26]. Group 3: Market Dynamics - The global textile industry has experienced significant shifts, with sportswear's market share increasing from approximately 5%-7% in the late 1980s to around 21% by 2024, indicating a growing trend that Shenzhou is well-positioned to capitalize on [17][18]. - The company has faced challenges in maintaining profit margins due to rising raw material costs and market fluctuations, but it has shown resilience by adapting its operational strategies [26][32]. - As the industry evolves, Shenzhou's focus on diversifying its client base and expanding its product offerings will be crucial for sustaining growth and mitigating risks associated with client concentration [27][29].

Core Viewpoint - China Galaxy Securities initiates coverage on Shenzhou International, giving it a "Buy" rating, highlighting its strong competitive advantages in R&D, supply chain management, production efficiency, and brand quality, with significant client relationships with top international brands [1] Group 1: Financial Performance - The company is a leading vertically integrated knitwear manufacturer, expecting revenue of 28.663 billion yuan in 2024, a 14.8% year-on-year increase, and a net profit of 6.241 billion yuan, a 36.9% increase [1] - In 2024, sportswear will be the main product line, generating 19.799 billion yuan, accounting for 69.1% of total revenue [1] - The gross margin for 2024 is projected at 28.10%, up 3.83 percentage points year-on-year, while the net margin is expected to be 21.77%, an increase of 3.52 percentage points [1] - The management expense ratio has been decreasing since 2021, projected at 6.76% in 2024, down 0.77 percentage points [1] - Inventory turnover days are expected to be 114 days, and accounts receivable turnover days are projected at 70 days in 2024 [1] Group 2: Global Capacity Expansion - The company is actively expanding its global production capacity to strengthen its industry leadership, with overseas factories accounting for approximately 53% of total garment output in 2023, a 7 percentage point increase year-on-year [2] - A new garment factory in Cambodia began production in March 2025, employing around 4,000 staff [2] - A new fabric factory in Vietnam is progressing well, expected to start production by the end of 2025, with a planned capacity of 200 tons per day [2] Group 3: Supply Chain Integration - The company employs a vertically integrated supply chain model that covers the entire industry chain from raw material procurement to finished product delivery, enhancing efficiency through deep integration of production processes [3] - The procurement process incorporates multiple core departments to ensure efficient and stable supply chain operations, with a focus on nearshore and localized sourcing to improve response times [3] Group 4: Client Relationships - The company has a strong client base in the sports and leisure apparel sector, with major clients like NIKE, ADIDAS, UNIQLO, and PUMA contributing 80.7% of total revenue in 2024 [4] - Recent collaborations with new clients such as lululemon and Lacoste have been established [4] - The company offers a comprehensive ODM "one-stop" service model, integrating fabric development and garment manufacturing to deepen client relationships [4]

Core Viewpoint - China Galaxy Securities initiates coverage on Shenzhou International (02313) with a "Buy" rating, highlighting its strong competitive advantages in R&D, supply chain management, production efficiency, and brand quality, along with deep partnerships with leading international brands [1] Group 1: Financial Performance - The company is a global leader in vertically integrated knit manufacturing, expecting revenue of 28.663 billion yuan in 2024, a 14.8% year-on-year increase, and a net profit of 6.241 billion yuan, up 36.9% [1] - In 2024, sportswear will be the main product line, generating 19.799 billion yuan, accounting for 69.1% of total revenue [1] - The gross margin for 2024 is projected at 28.10%, an increase of 3.83 percentage points, while the net margin is expected to be 21.77%, up 3.52 percentage points [1] - The management expense ratio has been decreasing since 2021, projected at 6.76% in 2024, down 0.77 percentage points [1] - Inventory turnover days are expected to be 114 days, and accounts receivable turnover days are projected at 70 days in 2024 [1] Group 2: Global Capacity Expansion - The company is actively expanding its global production capacity to strengthen its industry leadership, with overseas factories accounting for approximately 53% of total garment output in 2023, a 7 percentage point increase year-on-year [2] - A new garment factory in Cambodia began operations in March 2025, employing around 4,000 staff [2] - A new fabric factory in Vietnam is progressing well, expected to start production by the end of 2025, with a planned capacity of 200 tons per day [2] Group 3: Supply Chain Integration - The company employs a vertically integrated supply chain model that covers the entire industry chain from raw material procurement to finished product delivery, enhancing efficiency through deep integration of production processes [3] - The procurement process incorporates multiple core departments to ensure efficient supply chain management and stable development [3] - The company promotes nearshore and localized procurement to enhance the responsiveness of raw material sourcing, ensuring quick order production and delivery [3] Group 4: Client Relationships - The company has a strong client base in the sports and leisure apparel sector, with major clients like NIKE, ADIDAS, UNIQLO, and PUMA contributing 80.7% of total revenue in 2024 [4] - The company has been expanding its client portfolio by partnering with new brands such as lululemon and Lacoste [4] - Through a dedicated factory model and collaborative R&D, the company provides a comprehensive ODM "one-stop" service that integrates fabric development and garment manufacturing [4]

Investment Rating - The report maintains a "Buy" rating for several key companies in the textile and apparel sector, including Anta Sports, Li Ning, and others, while recommending "Add" for Chow Tai Fook and Chao Hong Ji [5][11]. Core Insights - Inditex, the parent company of Zara, reported a stable performance for FY2025H1, with revenue growth of 1.6% year-on-year to €18.4 billion, and a net profit increase of 0.8% to €2.8 billion [1][16]. - The report highlights the resilience of the sportswear segment, which is expected to outperform the overall apparel market, with a healthy inventory turnover ratio of 4-5 [3][22]. - Long-term growth strategies for Inditex include enhancing brand positioning, customer service, and sustainable practices, with a projected 5% increase in total sales area from 2025 to 2026 [2][21]. Summary by Sections Textile and Apparel - Inditex's FY2025H1 revenue reached €18.4 billion, with a 5.1% increase on a currency-neutral basis, and a gross margin of 58.3% [1][16]. - The company reported a healthy inventory level of €3.466 billion, up 3.1% year-on-year, indicating strong inventory management [1][18]. Sportswear Segment - The sportswear sector is expected to show robust growth, with key companies like Anta Sports and Li Ning recommended for their strong performance and growth potential [25][38]. - The report notes that the sportswear segment's revenue for H1 2025 increased by 9.1% to ¥65.9 billion, with a net profit growth of 8.2% to ¥10.54 billion [34]. Jewelry Sector - The jewelry market is facing challenges, with gold jewelry consumption down 27% and 24% in Q1 and Q2 2025, respectively [37]. - Companies with strong product differentiation and brand power, such as Chow Tai Fook and Chao Hong Ji, are expected to outperform the industry [23][38]. Manufacturing Sector - The textile manufacturing sector is experiencing a shift due to new tariff policies, with companies like Shenzhou International recommended for their stable performance and valuation [24][38]. - The report indicates that the manufacturing segment's revenue grew by 2.7% in H1 2025, while net profit declined by 9.8% [10][36].

Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the textile and apparel industry [1]. Core Insights - The report highlights that Chaohongji plans to go public in Hong Kong, and Xuezhongfei has proposed a strategic initiative of "brand enhancement and innovative breakthroughs" [1][6]. - The jewelry business of Chaohongji achieved a revenue of 392.4 million yuan in the first half of 2025, with a year-on-year growth of 21.2%, while the handbag business saw a decline of 17.4% [17][18]. - The report notes a significant increase in same-store sales for Chaohongji's jewelry business, with self-operated stores growing by 26.5% and franchise stores by 32.0% in the first half of 2025 [18]. Summary by Sections Industry Performance - The textile and apparel sector saw a decline of 0.26% this week, while the light industry manufacturing sector fell by 0.58%. The SW textile and apparel sector outperformed the market by 0.19 percentage points [19]. - The SW textile manufacturing sub-sector increased by 0.76%, and the SW apparel and home textile sub-sector rose by 0.66% [19]. Company Performance - The report lists the top five companies in the textile and apparel sector by weekly performance: Taimushi (+61.05%), Hongdou (+26.14%), Baoxini (+22.51%), Xingye Technology (+19.90%), and Xinhua Jin (+10.39%) [28]. - Conversely, the bottom five performers included Mankalon (-10.80%), Laishen Tongling (-8.78%), Meibang Apparel (-7.48%), Mingpai Jewelry (-7.35%), and Dia Shares (-7.05%) [28]. Industry Data Tracking - The report provides insights into raw material prices, noting that the cotton price index was 15,283 yuan/ton, with a month-on-month increase of 0.2% [33]. - For the first eight months of 2025, China's textile and apparel exports amounted to 94.513 billion and 102.761 billion USD, reflecting a year-on-year growth of 1.6% and a decline of 1.7%, respectively [48]. - In August 2025, the domestic retail sales totaled 3.97 trillion yuan, with a year-on-year growth of 3.4% [55]. Industry News - Skechers has completed its privatization and delisting from the New York Stock Exchange, with a transaction price exceeding 9 billion USD [6][67]. - Xuezhongfei debuted its new ice and snow series at the China International Fashion Week, emphasizing its strategic goal to become the leading brand in China's ice and snow down jackets [68][70]. - VF Corporation announced the sale of its Dickies brand for 600 million USD to Bluestar Alliance, aligning with its strategy to focus on core outdoor brands [71][73].

Group 1 - The core point of the news is that southbound funds have reduced their holdings in Shenzhou International (02313.HK) by 638,200 shares on September 19, 2025, marking a decrease of 0.68% [1][2] - Over the past five trading days, there have been three days of net reductions in holdings, totaling 350,500 shares [1][2] - In the last 20 trading days, there were 11 days of net increases in holdings, amounting to 4,557,900 shares [1][2] Group 2 - As of now, southbound funds hold 93,446,500 shares of Shenzhou International, which represents 6.2% of the company's total issued ordinary shares [1][2] - Shenzhou International Group Holdings Limited primarily engages in the production and sale of knitted apparel products, utilizing a combination of OEM and ODM methods for manufacturing [2] - The company's product categories include sportswear, casual wear, underwear, and other knitted products, and it also engages in trading and property management through its subsidiaries [2]

Investment Rating - The report maintains an investment rating of "Synchronize with the market" for the textile and apparel industry [2][27]. Core Insights - In August 2025, domestic retail sales (社零) grew by 3.4% year-on-year, slightly below market expectations, with a total retail sales amounting to 3.97 trillion yuan [5][6]. - The retail sales growth for the textile and apparel sector in the first eight months of 2025 was 2.9%, with a notable increase in sports and entertainment products, which saw a growth of 20.6% [8][10]. - The online retail channel continues to outperform the overall retail market, with a year-on-year growth of 6.4% in physical goods online sales [6][10]. Summary by Sections Retail Performance - In August 2025, the year-on-year growth rates for dining and goods retail were 2.1% and 3.6%, respectively [5]. - The consumer confidence index in July 2025 was 89.0, reflecting a 1.1 point increase [5]. Channel Analysis - Online channels showed a year-on-year growth of 6.4% in physical goods, while offline channels like convenience stores and supermarkets demonstrated stable performance [6]. - For the first eight months of 2025, retail sales in convenience stores, supermarkets, department stores, specialty stores, and brand stores grew by 6.6%, 4.9%, 1.2%, 5.2%, and 1.7%, respectively [6]. Sector-Specific Insights - The jewelry sector saw a significant year-on-year growth of 16.8% in August 2025, with gold prices reaching an average of 775.92 yuan per gram, up 36.7% year-on-year [7][11]. - The textile and apparel sector's year-on-year growth was 3.1% in August 2025, with a marginal improvement compared to previous months [7][10]. Investment Recommendations - The report recommends focusing on brands like 361 Degrees, with a noted increase in revenue growth among major sports brands [8][10]. - For the textile manufacturing sector, it suggests tracking the recovery of Nike, which could positively impact overall sector valuations [10].