[Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) The company reported a 0.7% revenue increase to $775.1 million, with strong net cash and a 10.9% operating profit margin Interim Results Summary (USD '000) | Metric | H1 2025 | Change | | :--- | :--- | :--- | | Shipments | +3.8% | Growth | | Revenue | $775.1 million | +0.7% | | Net Cash Position | $291.3 million | Maintained Strong | | Operating Profit | $84.7 million | - | | Operating Profit Margin | 10.9% | - | | Reported Net Profit | $78.1 million | - | | Adjusted Net Profit | $77.9 million | - | | Interim Dividend | HK$0.52 per share | Payout Ratio over 70% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's financial performance, position, and cash flows for the interim period, highlighting key changes and trends [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, revenue slightly increased by 0.7% to $775.1 million, but gross profit and operating profit declined, leading to a 14.7% decrease in profit for the period to $78.1 million, with basic EPS at 9.5 US cents Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (USD '000) | Metric (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 775,074 | 770,011 | +0.7% | | Cost of sales | (599,916) | (571,128) | +5.0% | | Gross profit | 175,158 | 198,883 | -11.9% | | Operating profit (before fair value changes of financial instruments) | 84,724 | 99,052 | -14.5% | | Profit before tax | 91,869 | 105,393 | -12.8% | | Profit for the period | 78,117 | 91,514 | -14.7% | | Profit for the period attributable to owners of the parent | 78,633 | 91,944 | -14.5% | | Basic earnings per share (US cents) | 9.5 | 11.5 | -17.4% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities were $1.126 billion, a slight decrease from December 31, 2024, with net current assets at $588.6 million and a current ratio of 2.8, indicating a stable but slightly declining financial position Interim Condensed Consolidated Statement of Financial Position (USD '000) | Metric (USD '000) | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 537,139 | 530,125 | +1.3% | | Total current assets | 916,307 | 893,241 | +2.6% | | Total current liabilities | 327,690 | 279,146 | +17.4% | | Net current assets | 588,617 | 614,095 | -4.1% | | Total assets less current liabilities | 1,125,756 | 1,144,220 | -1.6% | | Net assets | 1,095,977 | 1,117,539 | -1.9% | | Total equity | 1,095,977 | 1,117,539 | -1.9% | [Interim Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, net cash from operating activities significantly decreased by 96% to $3.9 million, primarily due to negative working capital changes, while cash used in investing and financing activities increased, resulting in lower period-end cash and cash equivalents Interim Condensed Consolidated Statement of Cash Flows (USD '000) | Metric (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 3,906 | 99,178 | -96.1% | | Net cash flows used in investing activities | (25,264) | (15,689) | +61.1% | | Net cash flows used in financing activities | (48,931) | (42,809) | +14.3% | | Net decrease/(increase) in cash and cash equivalents | (70,289) | 40,680 | - | | Cash and cash equivalents at end of period | 350,786 | 334,585 | +4.8% | [Notes to the Interim Condensed Consolidated Financial Information](index=8&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed explanations and disclosures regarding the accounting policies, segment information, revenue, profit before tax, and other financial statement items [1. Basis of Preparation](index=8&type=section&id=1.%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with HKEX Listing Rules and HKAS 34, presented in USD using the historical cost convention - Financial information is prepared according to HKEX Listing Rules and HKAS 34, presented in USD, and uses the historical cost convention[10](index=10&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=8&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Revised HKFRS accounting standards were adopted, with HKAS 21 (Amendment) on lack of exchangeability having no material impact as all currencies used by the Group are exchangeable - HKAS 21 (Amendment) regarding currency exchangeability has no impact on the Group's financial information, as all transaction currencies are exchangeable[11](index=11&type=chunk)[12](index=12&type=chunk) [3. Operating Segment Information](index=9&type=section&id=3.%20Operating%20Segment%20Information) The Group operates manufacturing (footwear and handbags) and retail & wholesale (self-developed brands) segments, with manufacturing being the primary revenue source, generating $774.4 million in external sales and $87.75 million in segment results for H1 2025 - The Group primarily operates two segments: manufacturing (footwear and handbags) and retail & wholesale (self-developed brands)[13](index=13&type=chunk)[15](index=15&type=chunk) Operating Segment Information (USD '000) | Metric (USD '000) | Manufacturing (H1 2025) | Retail & Wholesale (H1 2025) | Total (H1 2025) | Manufacturing (H1 2024) | Retail & Wholesale (H1 2024) | Total (H1 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | External customer sales | 774,357 | 717 | 775,074 | 769,067 | 944 | 770,011 | | Segment results | 87,754 | (267) | 87,487 | 102,070 | (267) | 101,803 | | Segment assets (June 30, 2025) | 1,415,877 | 15,557 | 1,431,434 | - | - | - | | Segment assets (Dec 31, 2024) | 1,374,058 | 32,659 | 1,406,717 | - | - | - | [4. Revenue](index=12&type=section&id=4.%20Revenue) Total revenue for H1 2025 was $775.1 million, primarily from footwear and handbag sales, with North America as the largest market, followed by Europe and China, and all revenue recognized upon goods transfer Revenue by Product Type (USD '000) | Product Type (USD '000) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of footwear and handbags | 775,074 | 770,011 | Revenue by Geographical Market (USD '000) | Geographical Market (USD '000) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | North America | 377,120 | 360,241 | | Europe | 181,314 | 189,606 | | China | 119,990 | 128,634 | | Asia (excluding China) | 69,743 | 69,456 | | Others | 26,907 | 22,074 | [5. Profit Before Tax](index=14&type=section&id=5.%20Profit%20Before%20Tax) Profit before tax for H1 2025 was $91.87 million, a decrease from the prior year, influenced by increased cost of inventories sold, a shift from fair value gain to loss on financial assets, significantly reduced severance costs, and a foreign exchange gain Profit Before Tax (USD '000) | Metric (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 599,644 | 572,005 | +4.8% | | Depreciation of property, plant and equipment | 24,436 | 23,668 | +3.2% | | Net fair value gain/(loss) on financial assets | (219) | 1,369 | From loss to gain | | Severance payments and other related costs | 4 | 1,337 | -99.7% | | Net impairment loss on financial assets | 329 | 6,208 | -94.7% | | Exchange differences, net | (4,276) | 238 | From loss to gain | [6. Income Tax](index=14&type=section&id=6.%20Income%20Tax) Total income tax expense for H1 2025 was $13.75 million, a slight decrease year-on-year, with unchanged profit tax rates in China, Macau, and other regions, but increased current tax expenses in China and Macau and significantly reduced deferred tax expenses - China's profit tax rate is **25%**, Hong Kong's is **16.5%** (with a two-tiered system of **8.25%/16.5%** for some entities), and Macau's is **12%**[24](index=24&type=chunk)[25](index=25&type=chunk) Income Tax (USD '000) | Tax Type (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Current tax expense (China) | 7,342 | 5,899 | +24.5% | | Current tax expense (Macau) | 3,997 | 2,381 | +67.9% | | Current tax expense (Other regions) | 803 | 1,146 | -29.9% | | Deferred tax | 1,610 | 4,453 | -63.8% | | Total | 13,752 | 13,879 | -0.9% | [7. Dividends](index=15&type=section&id=7.%20Dividends) Total dividends declared and paid for H1 2025 significantly increased to $113.2 million, including a final dividend of HK$0.50 per share and a special dividend of HK$0.56 per share, with the Board declaring an interim dividend of HK$0.52 per share Dividends (USD '000) | Dividend Type (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Final dividend declared and paid (HK$0.50 per share) | 53,390 | 63,415 | -15.8% | | Special dividend declared and paid (HK$0.56 per share) | 59,796 | 0 | New | | Total | 113,186 | 63,415 | +78.5% | - The Board has declared an interim dividend of **HK$0.52 per ordinary share**, approximately **$55.708 million**[27](index=27&type=chunk) [8. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=16&type=section&id=8.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For H1 2025, basic EPS was 9.5 US cents (74.3 HK cents) and diluted EPS was 9.3 US cents (73.1 HK cents), both decreasing year-on-year, calculated based on profit attributable to ordinary equity holders and weighted average ordinary shares Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent (USD '000) | 78,633 | 91,944 | -14.5% | | Basic earnings per share (US cents) | 9.5 | 11.5 | -17.4% | | Basic earnings per share (HK cents) | 74.3 | 89.6 | -17.1% | | Diluted earnings per share (US cents) | 9.3 | 11.2 | -16.9% | | Diluted earnings per share (HK cents) | 73.1 | 87.8 | -16.8% | | Weighted average number of ordinary shares used in calculating basic earnings per share | 830,294,950 | 802,144,522 | +3.5% | [9. Property, Plant and Equipment](index=17&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment) In H1 2025, the Group's asset acquisition cost increased to $32.61 million, while asset disposals resulted in a net loss of $1.07 million, a shift from a gain in the prior year Property, Plant and Equipment (USD '000) | Metric (USD '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of assets acquired | 32,607 | 27,434 | +18.9% | | Net book value of assets disposed | 1,244 | 94 | +1223.4% | | Net loss/(gain) on disposal | 1,073 (Loss) | (44) (Gain) | From gain to loss | [10. Trade Receivables](index=17&type=section&id=10.%20Trade%20Receivables) As of June 30, 2025, total trade receivables increased by 29.3% to $305.2 million from December 31, 2024, with the majority aged within one month, and standard payment terms typically ranging from 30 to 90 days Trade Receivables Ageing (USD '000) | Ageing (USD '000) | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 147,312 | 112,285 | +31.2% | | 1 to 2 months | 104,012 | 84,535 | +23.0% | | 2 to 3 months | 43,933 | 32,298 | +36.0% | | 3 to 6 months | 9,984 | 5,434 | +83.7% | | Total | 305,241 | 234,552 | +29.3% | - Total trade receivables include amounts due from associates of **$41.492 million** and an allowance for expected credit losses of **$40.27 million**[31](index=31&type=chunk) [11. Financial Assets at Fair Value Through Profit or Loss](index=18&type=section&id=11.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss totaled $2.587 million, primarily listed equity investments, with a recognized fair value gain of $0.212 million for the period, indicating improved investment performance from a prior year loss Financial Assets at Fair Value Through Profit or Loss (USD '000) | Asset Type (USD '000) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Listed equity investments | 2,575 | 2,363 | | Listed debt investments | 12 | 5 | | Total | 2,587 | 2,368 | - In H1 2025, listed equity investments recognized a fair value gain of **$0.212 million** (H1 2024: loss of **$1.364 million**)[32](index=32&type=chunk) [12. Trade Payables](index=18&type=section&id=12.%20Trade%20Payables) As of June 30, 2025, total trade payables slightly decreased to $91.995 million from December 31, 2024, with the largest portion aged within one month Trade Payables Ageing (USD '000) | Ageing (USD '000) | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 75,026 | 75,166 | -0.2% | | 1 to 2 months | 10,072 | 8,296 | +21.4% | | Over 2 months | 6,897 | 11,642 | -40.8% | | Total | 91,995 | 95,104 | -3.2% | - Trade payables include amounts due to a joint venture of **$37.487 million**, repayable within **90 days**[33](index=33&type=chunk) [Chairman's Statement](index=19&type=section&id=Chairman%27s%20Statement) The Chairman highlights strong demand in sports and high-end fashion, challenges in H1 2025 profitability due to high base effect and operational inefficiencies, plans for capacity expansion and handbag business growth, and an upgraded MSCI ESG rating - Despite macroeconomic uncertainties, demand in sports and high-end fashion categories remains strong, with non-customer-dedicated manufacturing facilities operating near full capacity[34](index=34&type=chunk) - H1 2025 profitability faced challenges primarily due to a high base effect from early shipments before the Paris Olympics in H1 2024 and initial operational efficiency issues during capacity ramp-up in Indonesia and the Philippines[34](index=34&type=chunk) - The company plans to expand total capacity by an additional **20 million pairs** starting from 2025 and aims to develop the handbag and accessories manufacturing business into a significant long-term growth driver, having acquired a handbag factory in Vietnam[35](index=35&type=chunk) - The Board declared an interim dividend of **HK$0.52 per share** and will continue its excess cash return program, distributing an additional **$60 million** annually in FY2025 and FY2026[36](index=36&type=chunk) - MSCI ESG rating was upgraded from "A" to "**AA**", marking the second consecutive year of upgrade[36](index=36&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's business strategies, performance, financial health, and future outlook, including operational highlights, cash returns to shareholders, and liquidity [Business Strategies](index=20&type=section&id=Business%20Strategies) Stella International is renowned for its superior product design, craftsmanship, quality, and flexible production capabilities across diverse manufacturing bases, adopting a customer-centric model to offer integrated solutions including handbag and accessories manufacturing - The company is known for its excellent product design, craftsmanship, quality, and flexibility, with manufacturing bases across Vietnam, China, Indonesia, the Philippines, and Bangladesh[38](index=38&type=chunk) - Adopting a customer-centric business model, the company provides high-quality product development and customized manufacturing solutions, integrating handbag and accessories manufacturing to offer comprehensive solutions[38](index=38&type=chunk) [Three-Year Plan (2023-2025)](index=21&type=section&id=Three-Year%20Plan%20(2023-2025)) The company is implementing its 2023-2025 three-year plan focused on business growth and margin improvement, targeting a **10% operating profit margin** and low double-digit post-tax profit CAGR, through category portfolio enhancement, production expansion, management optimization, and cost efficiency - The plan targets achieving a **10% operating profit margin** and a low double-digit compound annual growth rate for post-tax profit[44](index=44&type=chunk) - Strategies include deepening cooperation with major global sports brands, expanding luxury and high-end fashion brands, and introducing fast-growing sports and fashion footwear brands[42](index=42&type=chunk) - Production capacity expansion involves increasing output at the new Solo, Indonesia footwear factory, collaborating with major brands to build dedicated sports footwear factories in Indonesia, and enhancing Bangladesh capacity[42](index=42&type=chunk) - Management efficiency optimization includes organizational restructuring, centralizing client management and factory operations, consolidating R&D teams, and linking management incentives to operational targets[42](index=42&type=chunk) - Enhancing cost efficiency and improving working capital involves strengthening the client portfolio to mitigate risks, improving inventory and cash flow management, and reinforcing cost control across all departments[45](index=45&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) In H1 2025, revenue slightly increased by 0.7% to $775.1 million, driven by a 3.8% rise in shipments, primarily from the sports category, but gross profit and net profit declined due to a high base effect and efficiency issues in new Indonesian and Philippine capacities Business Review | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 775.1 million USD | 770.0 million USD | +0.7% | | Shipments | 27.5 million pairs | 26.5 million pairs | +3.8% | | Average Selling Price | 27.4 USD/pair | 28.3 USD/pair | -3.2% | | Gross Profit | 175.2 million USD | 198.9 million USD | -11.9% | | Gross Profit Margin | 22.6% | 25.8% | -3.2 percentage points | | Operating Profit | 84.7 million USD | 99.1 million USD | -14.5% | | Operating Profit Margin | 10.9% | 12.9% | -2.0 percentage points | | Net Profit | 78.1 million USD | 91.5 million USD | -14.7% | | Adjusted Net Profit | 77.9 million USD | 92.9 million USD | -16.2% | | Adjusted Net Profit Margin | 10.1% | 12.1% | -2.0 percentage points | - Sports category sales grew by **8.2%**, accounting for **48.5%** of total manufacturing revenue; fashion and luxury categories combined saw a **3.5%** revenue decrease; casual category revenue declined by **9.2%**[46](index=46&type=chunk) - The decline in gross profit margin was primarily due to a high base effect from early shipments in the prior year and efficiency issues during the ramp-up of new capacities in Indonesia and the Philippines, leading to some production shifting to Vietnam and increasing costs[47](index=47&type=chunk) [Strong Net Cash Position](index=24&type=section&id=Strong%20Net%20Cash%20Position) As of June 30, 2025, the company maintained a strong net cash position of $291.3 million, despite dividend payouts and additional cash returns, with a net gearing ratio of **-26.6%** Strong Net Cash Position | Metric | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Position | 291.3 million USD | 326.1 million USD | -10.8% | | Net Gearing Ratio | -26.6% | -29.6% | Improvement | [Industry Recognition and Awards](index=25&type=section&id=Industry%20Recognition%20and%20Awards) The company's sustainability efforts continue to be recognized, with its MSCI ESG rating upgraded from "A" to "**AA**" in July 2025, marking the second consecutive year of improvement - MSCI ESG rating was upgraded from "A" to "**AA**", marking the second consecutive year of upgrade, reflecting the company's efforts in sustainability and transparency practices[53](index=53&type=chunk) [Outlook](index=25&type=section&id=Outlook) Full-year 2025 shipments are projected for moderate growth, though H2 profitability remains constrained by the pace of efficiency improvements in Indonesian and Philippine manufacturing facilities, with plans to add **20 million pairs** of capacity and develop the handbag and accessories business as a core growth driver - Full-year 2025 shipments are expected to grow moderately, but H2 profitability will be limited by the pace of efficiency improvements in Indonesian and Philippine manufacturing facilities[54](index=54&type=chunk) - Plans include adding an additional **20 million pairs** of total capacity starting from 2025, achieved by increasing capacity at the new Solo, Indonesia factory, launching a second manufacturing facility in Bangladesh, and accelerating the construction of a dedicated factory in Indonesia for the largest sports client[55](index=55&type=chunk) - The company is firmly committed to making the handbag and accessories manufacturing business a core growth driver, having acquired a small handbag and accessories factory in Vietnam to enhance quality and efficiency[55](index=55&type=chunk) - The company is confident in achieving the Three-Year Plan (2023-2025) targets of a **10% operating profit margin** and a low double-digit compound annual growth rate for post-tax profit[54](index=54&type=chunk) [Cash Returns to Shareholders](index=26&type=section&id=Cash%20Returns%20to%20Shareholders) The Board declared an interim dividend of **HK$0.52 per ordinary share**, maintaining a payout ratio of approximately **70%**, and committed to an additional annual cash return of up to **$60 million** to shareholders in 2025 and 2026 through share repurchases and special dividends - The Board declared an interim dividend of **HK$0.52 per ordinary share**, maintaining a payout ratio of approximately **70%**[57](index=57&type=chunk) - The company committed to an additional annual cash return of up to **$60 million** to shareholders in 2025 and 2026 through share repurchases and special dividends, beyond regular dividends[57](index=57&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=26&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, cash and cash equivalents increased by 4.8% to $350.8 million, but net cash from operating activities significantly decreased to $3.9 million due to working capital changes, while the current ratio of 2.8 indicates a sound financial position, with bank borrowings rising to $59.5 million and a net cash position of $291.3 million Liquidity, Financial Resources and Capital Structure | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | Change (vs June 30, 2024) | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 350.8 million USD | 423.5 million USD | 334.6 million USD | +4.8% | | Net cash inflow from operating activities | 3.9 million USD | - | 99.2 million USD | -96.1% | | Changes in working capital | -106.3 million USD | - | -27.0 million USD | - | | Trade receivables | 305.2 million USD | 234.6 million USD | 304.4 million USD | +0.3% | | Current assets | 916.3 million USD | 893.2 million USD | - | +2.6% (vs 2024/12/31) | | Current liabilities | 327.7 million USD | 279.1 million USD | - | +17.4% (vs 2024/12/31) | | Current ratio | 2.8 | 3.2 | - | -12.5% (vs 2024/12/31) | | Bank borrowings | 59.5 million USD | 5.9 million USD | - | +908.5% (vs 2024/12/31) | | Net cash position | 291.3 million USD | 417.6 million USD | 326.1 million USD | -10.8% (vs June 30, 2024) | | Net Gearing Ratio | -26.6% | - | -29.6% | Improvement | - The significant decrease in net cash inflow from operating activities was primarily due to negative working capital changes, including increased inventories and a lower base of trade receivables[59](index=59&type=chunk) - Foreign exchange risk primarily relates to fluctuations in RMB and HKD against USD[63](index=63&type=chunk) - As of June 30, 2025, pledged assets were valued at **$10.8 million**, with no contingent liabilities[64](index=64&type=chunk)[65](index=65&type=chunk) [Significant Acquisitions and Disposals](index=28&type=section&id=Significant%20Acquisitions%20and%20Disposals) There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period; however, post-period, the company acquired a small handbag and accessories factory in Vietnam in July 2025 to support business growth - No significant acquisitions or disposals occurred during the reporting period[67](index=67&type=chunk) - Subsequent to the reporting period, in July 2025, the company completed the acquisition of a small handbag and accessories factory in Vietnam to support the growth of its handbag and accessories manufacturing business[67](index=67&type=chunk) [Material Investments](index=28&type=section&id=Material%20Investments) As of June 30, 2025, the Group held no material investments representing 5% or more of its total assets - As of June 30, 2025, the Group held no material investments representing **5% or more** of its total assets[68](index=68&type=chunk) [Future Plans for Material Investments or Capital Assets](index=28&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Directors confirm that, apart from ordinary course of business, the Group currently has no plans for any material investments or acquisitions of capital assets - Apart from ordinary business operations, the Group currently has no plans for any material investments or acquisitions of capital assets[69](index=69&type=chunk) [Major Customers and Suppliers](index=28&type=section&id=Major%20Customers%20and%20Suppliers) The company considers customers and suppliers as core stakeholders, recognizing their success as integral to its growth, consistently ranking in the top 10% of supplier evaluations, and fostering strategic relationships for continuous improvement in craftsmanship, innovation, and efficiency - The company views customers and suppliers as core stakeholders, emphasizing that their success is inseparable from the company's growth[70](index=70&type=chunk) - The company consistently ranks in the **top 10%** in supplier evaluations and is committed to building strategic relationships with long-term partners to continuously improve craftsmanship, innovation, and efficiency[70](index=70&type=chunk) [Employees](index=28&type=section&id=Employees) As of June 30, 2025, the Group had approximately **43,400** direct employees and a total workforce of about **65,000**, fostering a culture of care, sharing, and learning through leadership programs, share option schemes, and share award schemes to attract, train, and retain talent Employees | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Direct employees | Approx. 43,400 | Approx. 42,600 | +1.9% | | Total workforce | Approx. 65,000 | - | - | - The company is committed to attracting, training, and retaining talent, fostering a culture of care, sharing, and learning through "Leadership Programs," share option schemes, and share award schemes[72](index=72&type=chunk) [Events After Reporting Period](index=29&type=section&id=Events%20After%20Reporting%20Period) No events with a material impact on the Group have occurred from the end of the reporting period up to the date of this announcement - No events with a material impact on the Group have occurred after the reporting period[73](index=73&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers the Audit Committee's review, interim dividend declaration, corporate governance practices, and publication details of the interim results announcement and report [Review of Accounts by Audit Committee](index=29&type=section&id=Review%20of%20Accounts%20by%20Audit%20Committee) The Audit Committee has reviewed the Group's unaudited interim results and accounting policies, discussing risk management and internal controls with management, with no disagreements - The Audit Committee has reviewed the interim results and accounting policies, and discussed risk management and internal controls with management, with no disagreements[74](index=74&type=chunk) [Interim Dividend](index=29&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of **HK$0.52 per ordinary share** for the six months ended June 30, 2025, payable on September 19, 2025, with share transfer registration suspended from September 5 to September 9, 2025 - The Board resolved to declare an interim dividend of **HK$0.52 per ordinary share**[75](index=75&type=chunk) - The dividend will be paid on **September 19, 2025**, with share transfer registration suspended from **September 5 to September 9, 2025**[75](index=75&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The company is committed to high standards of corporate governance, complying with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, advocating an integrated corporate and business governance model, and adopting a standard code for directors' securities transactions - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[76](index=76&type=chunk) - The company advocates an integrated model of corporate governance and business governance, and has adopted a standard code for directors' securities transactions[77](index=77&type=chunk)[78](index=78&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[79](index=79&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX and the company's websites, with the Group's interim report for the six months ended June 30, 2025, to be published on the respective websites in due course - The interim results announcement has been published on the HKEX and the company's websites, and the interim report will be published in due course[80](index=80&type=chunk)

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | | | 致：香港交易及結算所有限公司 公司名稱: 九興控股有限公司 呈交日期: 2025年8月6日 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01836 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 836,836,000 | | | | 836,836,000 | | 增加 / 減少 (-) | | | 180,000 | | | | | | 本月底結存 | | | 837,016,000 | | 0 | | 837,016,000 | 第 2 頁 共 10 頁 v 1.1.1 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | ...

Core Viewpoint - The company is experiencing short-term pressure on profitability due to slower employee efficiency improvements and the impact of tariffs, but maintains a strong order book and is expanding its customer base, leading to a strong medium to long-term outlook [1][2]. Financial Performance - In Q2 2025, the company's revenue increased by 2.9% to $444 million, with manufacturing revenue rising by 2.5% to $433 million, and shipment volume up by 4.1% to 15.4 million pairs. The average selling price decreased by 1.7% to $28.2 per pair [1]. - The company has adjusted its profit forecast, expecting net profits of $169 million, $183 million, and $201 million for 2025-2027, with year-on-year growth rates of -1%, 9%, and 10% respectively, corresponding to a PE of 9X for 2025 and 8X for 2026 [1][2]. Production Capacity and Challenges - Production ramp-up in Indonesia and the Philippines has been slower than expected due to insufficient employee efficiency, leading to some products being produced in Vietnam, which has increased production costs [2]. - The company is accelerating the construction of its factory in Indonesia, now expected to be completed in 2026, one year earlier than initially planned, and is expanding production around its existing factory in Vietnam [2]. Customer Orders and Market Position - The company has a strong order certainty for Q4 2025 and is planning to initiate 2026 order planning in Q3. It is also progressing with new customer collaborations, including two new sports clients and one luxury client expected to be developed in 2026 [1][2]. - The company is recognized as a leading manufacturer in the sports fashion footwear sector, with stable core customer orders and high product barriers, indicating strong medium to long-term certainty despite short-term challenges [2].

Investment Rating - The report maintains a strong buy rating for the company [1][4] Core Views - The company's manufacturing business revenue increased by 2.5% in Q2 2025, with a shipment volume increase of 4%, but the average selling price decreased by 2% [1] - Employee efficiency improvements are slower than expected, leading to capacity ramp-up challenges, which are expected to impact short-term profitability [1] - The company is expected to bear some tariff costs in the second half of 2025, particularly in Q4, but these impacts are anticipated to lessen in the following year [1] - The company has a strong order book for Q4 2025 and is actively expanding its customer base, with plans to onboard new clients in 2026 [1] Financial Data and Valuation - Total revenue for 2025 is projected at $1.614 billion, with a year-on-year growth rate of 4% [3] - Net profit for 2025 is expected to be $169 million, reflecting a slight decline of 1% year-on-year [3] - The company’s PE ratios are projected at 9X for 2025 and 8X for 2026, indicating a favorable valuation [1][3] - The company’s total assets are expected to reach $1.420 billion by 2025, with a total liability of $317 million [8] Performance Metrics - The company’s gross margin is projected to be 24.2% in 2025, with a net margin of 10.5% [9] - Return on equity (ROE) is expected to remain stable at 15.5% for 2025 [9] - The company’s debt-to-asset ratio is projected to be 22.3% in 2025, indicating a manageable level of debt [9]

Investment Rating - The investment rating for the company is "Buy" [6] Core Insights - The company is a leading high-end footwear manufacturer with a strong design and development capability, benefiting from scarce production capacity in Southeast Asia. It has established deep partnerships with renowned international brands such as Nike, Balenciaga, Prada, and UGG, covering a diverse range of athletic, luxury, fashion, and casual brands. The average selling price (ASP) for 2024 is projected to be $28.4, significantly above industry standards, with a diversified production layout that is rare in the market [1][4] - Despite external disruptions such as tariffs, the company has secured a robust order book for Q1-3, with expectations for improved order visibility in Q4 due to positive developments in US-China trade negotiations. The company anticipates maintaining mid-single-digit growth in shipment volume for the year, with ASP remaining stable [2][4] - The company is accelerating its capacity expansion, particularly in Indonesia and Bangladesh, with expectations of short-term fluctuations in profit margins due to new factory ramp-up and employee training. However, the long-term growth trend remains positive [3][4] Financial Summary - Revenue projections for 2024-2027 are as follows: $1.545 billion in 2024, $1.621 billion in 2025 (up 4.94%), $1.743 billion in 2026 (up 7.48%), and $1.867 billion in 2027 (up 7.12%). Net profit attributable to the parent company is expected to be $171.1 million in 2024, $165.1 million in 2025 (down 3.47%), $184.9 million in 2026 (up 11.98%), and $204.4 million in 2027 (up 10.56%) [5][11] - The company is expected to maintain a dividend payout ratio of 70% in 2025, with a commitment to a $60 million share buyback or special dividend, resulting in a dividend yield of 11% [4][11]

Financial Performance - The company's revenue for 2023 was $1,545,114 thousand, reflecting a 3.5% increase compared to 2022[15]. - Shareholders' profit attributable for 2023 was $171,049 thousand, representing a 21.2% increase from 2022[18]. - The compound annual growth rate (CAGR) from 2021 to 2024 is projected to be 21.5%[24]. - The operating profit margin for 2023 was 10.7%, with a forecasted increase to 11.9% in 2024[25]. - The company achieved an operating profit margin of 11.9% in 2024, up from 10.7% in 2023, exceeding the target of 10% set in the three-year plan (2023-2025) for the second consecutive year[34]. - Return on invested capital (ROIC) increased significantly to 21.6% in 2024, more than double the 10% recorded in 2019, reflecting the effectiveness of the long-term strategy implemented in 2023[35]. - Consolidated revenue increased by 3.5% to $1,545,100,000, with shipment volume rising by 8.2% to 53,000,000 pairs[49]. - Gross profit grew by 4.7% to $384,000,000, resulting in a gross profit margin of 24.9%[51]. - Operating profit rose by 15.7% to $184,500,000, benefiting from increased orders for athletic footwear and improved operational efficiency[52]. - Net profit for the year was $170,100,000, reflecting an increase from $140,300,000 in the previous year[53]. - The return on invested capital (ROIC) reached 21.6%, significantly up from approximately 10% in 2019[55]. - Net cash position improved by 45.3% to $417,600,000, compared to $287,400,000 at the end of 2023[56]. - The company aims to achieve a low double-digit percentage compound annual growth rate for after-tax profit in the upcoming years[37]. - The company has a history of strong financial performance, which supports its dividend distribution strategy[171]. Strategic Initiatives - The company has launched its first three-year strategic plan for 2023-2025[12]. - The company plans to further invest in design and development capabilities for leather products, including handbags and accessories[10]. - The company aims to become a preferred partner in the leather goods sector, enhancing its supply chain efficiency[5]. - The three-year plan includes expanding and diversifying production bases to stabilize cost structures and enhance operational efficiency[46]. - The company is expanding its production capabilities in Southeast Asia, including new factories in Indonesia and Vietnam[12]. - The company is focusing on strengthening partnerships with major sports brands and luxury fashion brands to support growth in the athletic and luxury footwear categories[46]. - The company anticipates moderate growth in overall shipments by 2025, despite macroeconomic challenges and geopolitical uncertainties, by increasing shipments to high-end fashion clients and new customers in the sports category[59]. - The company aims to enhance its handbag and accessories manufacturing business as a key growth pillar, considering the acquisition of a small handbag and accessories factory in Vietnam to leverage its expertise[60]. Corporate Governance - The board of directors is responsible for leading and overseeing the company’s affairs to promote success and ensure decisions align with the group’s best interests[80]. - The corporate governance committee focuses on compliance, risk management, investor relations, and corporate social responsibility, ensuring adherence to governance codes[81]. - The company has adopted stock option and share reward plans to recognize and reward employee contributions, aiming to retain talent and support ongoing operations[75]. - The board consists mainly of independent non-executive directors, ensuring strong independent elements for effective judgment and decision-making[86]. - The corporate governance practices reflect compliance with all governance code provisions throughout the year 2024[84]. - The corporate governance committee has conducted reviews of the annual governance report and related disclosures, ensuring transparency and accountability[85]. - The board has adopted a continuous evaluation process to assess its performance regularly[91]. - The company has established a board diversity policy, considering various factors such as gender, age, and professional experience in the nomination process[88]. - The gender ratio among employees is currently 4:1 in favor of males, with ongoing efforts to enhance gender diversity in recruitment[90]. - The nomination committee consists of four independent non-executive directors, with a focus on maintaining board diversity and independence[97]. - Independent non-executive directors are subject to a nine-year term limit, after which their reappointment requires an independence assessment[96]. - The company has implemented a formal and transparent procedure for appointing new directors, ensuring a structured succession plan[95]. - Directors receive ongoing training to stay updated on the company's operations and regulatory environment, with various training types categorized as legal, business, and financial[101]. - The board evaluation process includes feedback through questionnaires and interviews to improve efficiency and effectiveness[92]. - The company has established a system for regular review of business and financial performance, allowing for timely follow-up on unresolved issues[106]. Risk Management - The board is responsible for evaluating and determining the nature and extent of risks the company is willing to take to achieve strategic objectives, including significant risks related to environmental, social, and governance (ESG) factors[118]. - The internal control system is designed to manage risks within an acceptable risk profile rather than completely eliminate risks associated with achieving business objectives[118]. - The company conducts an annual review of its risk management and internal control systems to ensure they meet the requirements for financial reporting and listing rules[119]. - No significant internal control failures or weaknesses were identified during the year, indicating the effectiveness of the company's risk management and internal control systems[119]. - The internal audit team reports directly to the audit committee, chairman, and CEO, ensuring oversight of internal control matters[120]. - The company’s risk management and internal control systems have been comprehensively reviewed and positively assessed by third-party professional institutions[119]. Shareholder Returns - A final dividend of HKD 0.50 per share and a special dividend of HKD 0.56 per share were proposed, reflecting a commitment to return approximately 70% of adjusted net profit to shareholders[36]. - The board proposed a final dividend of HKD 0.50 per ordinary share and an interim dividend of HKD 0.65 per ordinary share, maintaining a payout ratio of approximately 70% based on adjusted net profit of USD 4,171,200,000[63]. - For the fiscal year ending December 31, 2024, the total dividend per ordinary share is projected to be HKD 1.71, subject to shareholder approval[64]. - The company plans to return up to $60,000,000 in additional cash to shareholders annually over the next three years as part of its excess cash return plan[49]. - The board aims to provide a cash return of 70% to shareholders through dividends and share buybacks, ensuring sufficient financial resources for business growth[170]. - The company has adopted a dividend policy to provide stable and sustainable dividends during profitable periods while maintaining financial resources for growth[170]. Employee Relations - The company emphasizes the importance of human resources as a key asset for development and expansion, actively seeking to attract, train, and retain motivated talent[75]. - The company is committed to a caring culture for employees, recognizing human resources as a vital asset for development and expansion, and aims to build management teams through effective training and development programs[191]. - As of December 31, 2024, the group has approximately 42,600 direct employees, an increase from about 39,900 on December 31, 2023, with a total workforce of around 63,200[75]. Market Position - The company has established a strong customer base, including leading global brands such as Nike and Coach[9]. - The company has been included in the Hang Seng Composite Index (HSCI), enhancing its market position and attractiveness to investors[35]. - The company was included in the Hang Seng Composite Index, enhancing global investor participation and liquidity[48]. - The company is focused on expanding its high-end fashion customer base and establishing a fashion sports footwear business, which is a key growth driver[157].

九兴控股 20250402 摘要 Q&A 九兴控股 2024 年的业绩表现如何？ 九兴控股在 2024 年实现了显著的业绩增长。集团收入同比增长 3.5%，主要由 出货量上升推动，出货量增长约 8%。尽管平均单价下滑了约 4%，但这主要是由 于运动板块的最大客户贡献了较大的增长，而运动板块的平均单价通常低于集 • 九兴控股 2024 年净利润同比增长 21.3%至 1.7 亿美元，现金储备达历史新 高 1.18 亿美元，同比增长 45%，支持高派息及额外现金回报计划。预计 2025 年通过新增产能带动出货量增长约 5%，收入预计增长中个位数。 • 公司战略重心转向产能扩张，目标 2025 年经营利润率提升 50 个基点至 12.4%，预计经营利润达 1.85 亿至 1.89 亿美元。新增产能主要来自凡甲和 印尼丘鲁市的新工厂，分别于 2025 年 1 月和第四季度投产，服务于安德玛 和利德曼等新客户。 • 公司通过优化板块占比提升经营利润率，目前已达稳定状态。越南工厂通 过提升效率增加产能，主要服务于时尚品牌。预计 2025 年耐克订单与 2024 年持平，工厂使用率维持在 80%左右，新款开发数量较去年翻倍 ...

摘要 Q&A 请简要回顾一下九星控股 2024 年的业绩表现。 2024 年，九星控股的收入达到 15.45 亿美元，同比增长约 3.5%。尽管平均单价 下调了约 4%，但出货量增长了 8.2%。毛利率提升了 30 个基点，达到 24.9%， 经营利润率则达到了 11.9%，增长了 1.2 个百分点。集团的经营利润总额为 1.85 亿美元，同比增长 16%。净利润增长 21%，达到 1.7 亿美元。净现金流约 为 1,180 万美元，同比增长 45%。 • 九星控股 2024 年经营利润率达 11.9%，同比增长 1.2 个百分点，经营利润 总额 1.85 亿美元，同比增长 16%，净利润增长 21%至 1.7 亿美元，净现金 流同比增长 45%至 1,180 万美元，显示出强劲的盈利能力。 • 公司计划将调整后净收益的 70%用于股东分红，并宣布 2024-2026 年每年 通过特别股息返还股东 6,000 万美元，预计 2025 年每股普通分红 115 港仙， 加上特别现金回报 56 港仙，总计 171 港仙，同比增长 66%。 • 九星控股通过优化产能配置和客户结构提高盈利能力，新增 ARM 等高端运 ...

Financial Performance - Shipment volume increased by 8.2%[2] - Operating profit rose by 15.7% to $184.5 million, with an operating margin increase from 10.7% to 11.9%[2] - Net profit increased by 21.2% to $170.1 million[2] - Revenue for the year reached $1,545.1 million, compared to $1,492.7 million in the previous year[5] - Gross profit increased to $384.0 million from $366.7 million, reflecting a growth in gross margin[5] - Basic earnings per share increased to HK$1.6490 from HK$1.3937, equivalent to $0.2113 from $0.1780[7] - The operating profit before fair value changes of financial instruments was $184,534 thousand, with a net profit before tax of $198,822 thousand, reflecting a solid financial performance[25][29] - The company reported a pre-tax profit of $198,822,000 for 2024, up from $161,336,000 in 2023, reflecting a growth of approximately 23%[52] - Net profit for the year was $170,100,000, reflecting an increase from $140,300,000 in 2023, with an adjusted net profit margin of 11.1%[95] Cash Flow and Financial Position - Strong net cash position of $417.6 million, up 45.3% from $287.4 million as of December 31, 2023[2] - Cash flow from operating activities amounted to $264.1 million, compared to $229.2 million in the previous year[12] - Cash and cash equivalents increased by $130,071 thousand in 2024, up from $81,792 thousand in 2023[14] - The ending cash and cash equivalents balance for 2024 was $423,547 thousand, an increase from $294,471 thousand in 2023[14] - The company maintained a net cash position of USD 417.6 million as of December 31, 2024, compared to USD 287.4 million as of December 31, 2023, with a net capital debt ratio of -37.4%[107] - The current ratio as of December 31, 2024, was 3.2, indicating strong liquidity and financial stability, compared to 3.1 as of December 31, 2023[105] Dividends and Shareholder Returns - Proposed final dividend of HK$0.50 per share and an additional special dividend of HK$0.56 per share, totaling HK$1.71 for the year 2024[2] - The proposed final dividend for 2024 is approximately $112,998,000, compared to $63,415,000 in 2023, indicating a commitment to returning value to shareholders[57] - The company achieved a cash return to shareholders with a proposed final dividend of HKD 0.50 per share and an interim dividend of HKD 0.65 per share, maintaining a payout ratio of approximately 70% based on adjusted net profit of USD 171.2 million[103] Investments and Capital Expenditures - Capital expenditures for the year were $66,980 thousand, indicating ongoing investment in property, plant, and equipment[27][31] - The company plans to gradually increase production capacity in new factories in Solo, Indonesia, and Bangladesh as part of its 2023-2025 strategy[81] - The company is considering acquiring a small handbag and accessories factory in Vietnam to enhance its production capabilities and accelerate growth in this segment[102] Market and Revenue Segmentation - North America accounted for the largest share of revenue at $732,874 thousand, followed by Europe at $361,676 thousand and China at $260,219 thousand[32] - The manufacturing segment generated external sales of $1,542,519 thousand, while the retail and wholesale segment contributed $2,595 thousand, indicating a strong reliance on manufacturing for revenue[25][37] - The average selling price of footwear decreased by 4.4% to $28.4 per pair due to a higher proportion of lower-priced athletic products[88] Employee and Operational Metrics - The total number of employees increased to approximately 63,200 as of December 31, 2024, from about 59,800 the previous year, reflecting the company's growth and expansion efforts[117] - The company’s total employee benefits expenses rose to $376,224,000 in 2024, up from $363,132,000 in 2023, reflecting increased workforce costs[44] Sustainability and Governance - The MSCI ESG rating improved from "B" to "A" in 2024, reflecting the company's commitment to sustainability goals[78] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange and has complied with all relevant provisions for the year ending December 31, 2024[121] Miscellaneous - The company did not recognize any impact from the revised Hong Kong Financial Reporting Standards on its financial position or performance for the year[19] - The company has no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the year ended December 31, 2024[112] - The board is not aware of any significant matters affecting the company or its subsidiaries since the end of the financial year[127]

Financial Performance - The company achieved an operating profit margin of 12.9% in the first half of 2024, up from 10.7% in 2023, exceeding initial targets[3]. - Revenue and shipment volume increased significantly in the first half of 2024, driven by early shipments to clients in anticipation of the summer travel season[3]. - The company's consolidated revenue for the six months ended June 30, 2024, increased by 7.5% to $770 million, compared to $716.1 million in the same period of 2023[10]. - The gross profit grew by 20.0% to $198.9 million, with a gross margin of 25.8%, up from 23.1% in the previous year[11]. - Operating profit surged by 52.9% to $99.1 million, with an operating profit margin of 12.9%, compared to 9.0% in the same period last year[12]. - Net profit reached $91.5 million, significantly higher than $55.2 million in the prior year, with adjusted net profit at $392.9 million, up from $60.3 million[13]. - The group reported a profit before tax of $572,005,000 for the six months ended June 30, 2024, up from $546,018,000 in the same period of 2023, indicating a growth of approximately 4.8%[41]. - Basic earnings per share for the six months ended June 30, 2024, were $0.114, compared to $0.070 for the same period in 2023, representing a significant increase of 62.9%[45]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.65 per share, consistent with a long-term payout ratio of 70%[3]. - The company plans to return up to USD 60 million to shareholders annually over the next three years through a combination of share buybacks and dividends[3]. - A mid-term dividend of HKD 0.65 per share was declared, maintaining a payout ratio of approximately 70% based on adjusted net profit[17]. - The group declared an interim dividend of 65 Hong Kong cents per share, amounting to approximately $67,857,000, compared to 45 Hong Kong cents per share in the previous year[44]. Production and Operational Efficiency - The company is focusing on expanding high-margin product capacity, starting with a new factory in Solo, Indonesia, to optimize production efficiency[3]. - The company aims to enhance production capacity in its new factory in Indonesia and continue expanding its manufacturing facilities in Bangladesh[16]. - The company is enhancing its production capabilities in Bangladesh and Indonesia to stabilize its cost base and improve operational efficiency[8]. - The company’s non-sport footwear production facilities have been operating near full capacity since last year, despite a slowdown in the global luxury market[3]. Cash Flow and Financial Position - The company maintained a strong net cash position of $326.1 million as of June 30, 2024, compared to $162.5 million a year earlier[14]. - As of June 30, 2024, the group's cash and cash equivalents amounted to approximately $334.6 million, an increase of 92.9% compared to $173.5 million on June 30, 2023[18]. - The net cash inflow from operating activities for the six months ended June 30, 2024, was $99.2 million, significantly higher than $28.2 million for the same period in 2023[18]. - The group’s current ratio as of June 30, 2024, was 3.2, indicating strong liquidity compared to 3.1 on December 31, 2023[18]. - The group reported a decrease in cash outflow for investing activities to $15.7 million, down 29.9% from $22.4 million for the same period in 2023[18]. Employee and Workforce Metrics - The total number of direct employees increased to approximately 42,100 as of June 30, 2024, compared to about 39,900 on December 31, 2023[21]. - The total remuneration paid to key management personnel was $871,000, down from $1,066,000 in the previous year, indicating a decrease of 18.3%[100]. Stock Options and Incentive Plans - The company’s long-term incentive plan allows for the issuance of stock options, with a total of 27,970,000 options granted under the plan[59]. - The company has a practice of not cash settling stock options, and all options are accounted for as equity-settled plans[64]. - The new share option plan ("2024 Plan") was approved by shareholders on May 9, 2024, and is effective for ten years from the adoption date[133]. - The purpose of the 2024 Plan is to reward qualified participants for their contributions to the group's growth, attract and retain talent, and align the interests of participants with those of shareholders[134]. - The total number of stock options granted across the three periods amounts to 34,000,000, with varying exercise prices and vesting schedules[126]. Sustainability and ESG Ratings - The company received an upgraded MSCI ESG rating to "A" as part of its commitment to sustainability and transparency[4]. Market and Revenue Breakdown - North America and Europe accounted for 46.8% and 24.6% of total revenue, respectively, while China, Asia (excluding China), and other regions contributed 16.7%, 9.0%, and 2.9%[10]. - Revenue from footwear and handbag sales in the manufacturing segment was $769,067 thousand, with significant contributions from various regions including North America at $360,241 thousand[39]. Governance and Compliance - The company has complied with all provisions of the corporate governance code during the six-month period ending June 30, 2024[118]. - The company emphasizes a governance model that combines corporate governance with business governance to create long-term value[119].