宝胜国际(03813) - 2025 - 中期业绩

Report Overview Financial Highlights The company reported significant declines in revenue, gross profit, operating profit, and profit attributable to owners for the six months ended June 30, 2025, alongside reduced margins and dividends Financial Performance for the Six Months Ended June 30 | Financial Performance (RMB thousands) | 2025 | 2024 | Change | | :---------------------------------- | :------- | :------- | :----- | | Revenue | 9,159,425 | 9,983,269 | -8.3% | | Gross Profit | 3,069,210 | 3,415,700 | -10.1% | | Operating Profit | 281,596 | 482,555 | -41.6% | | Profit Attributable to Owners of the Company | 187,615 | 335,722 | -44.1% | | Gross Profit Margin (%) | 33.5% | 34.2% | -0.7 percentage points | | Operating Profit Margin (%) | 3.1% | 4.8% | -1.7 percentage points | | Basic Earnings Per Share (RMB cents) | 3.62 | 6.48 | -44.1% | | Interim Dividend (HKD) | 0.0115 | 0.02 | -42.5% | | Special Dividend (HKD) | 0.0115 | 0.02 | -42.5% | Financial Position as of June 30 | Financial Position (RMB thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :--------------- | :----- | | Inventories | 4,865,388 | 4,946,314 | -1.6% | | Trade and Other Receivables | 2,009,997 | 2,124,515 | -5.4% | | Cash and Cash Equivalents | 1,232,169 | 1,419,052 | -13.2% | | Bank Borrowings | 196,778 | 39,273 | 401.1% | Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, revenue declined 8.3% to RMB 9,159,425 thousand, with significant drops in gross profit, operating profit, and profit attributable to owners Key Data from Condensed Consolidated Statement of Profit or Loss | Metric (RMB thousands) | 2025 | 2024 | | :--------------------- | :------- | :------- | | Revenue | 9,159,425 | 9,983,269 | | Cost of Sales | (6,090,215) | (6,567,569) | | Gross Profit | 3,069,210 | 3,415,700 | | Operating Profit | 281,596 | 482,555 | | Profit for the Period | 200,106 | 338,006 | | Attributable to Owners of the Company | 187,615 | 335,722 | | Basic Earnings Per Share | RMB 3.62 cents | RMB 6.48 cents | Condensed Consolidated Statement of Comprehensive Income Profit for the period was RMB 200,106 thousand, but fair value losses and exchange differences increased other comprehensive expenses, reducing total comprehensive income to RMB 197,764 thousand Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric (RMB thousands) | 2025 | 2024 | | :--------------------- | :------- | :------- | | Profit for the Period | 200,106 | 338,006 | | Fair value (loss) gain on equity instruments at fair value through other comprehensive income | (716) | 1,256 | | Exchange differences arising from translation of foreign operations | (1,626) | 3,313 | | Other comprehensive (expense) income for the period | (2,342) | 4,569 | | Total comprehensive income for the period | 197,764 | 342,575 | | Attributable to Owners of the Company | 185,273 | 340,291 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, both non-current and current assets decreased, with a notable increase in bank borrowings despite a slight growth in net assets Key Data from Condensed Consolidated Statement of Financial Position | Metric (RMB thousands) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------- | :--------------- | | Non-current assets | 3,329,854 | 3,630,267 | | Current assets | 9,261,076 | 9,407,623 | | Inventories | 4,865,388 | 4,946,314 | | Trade and other receivables | 2,009,997 | 2,124,515 | | Cash and cash equivalents | 1,232,169 | 1,419,052 | | Current liabilities | 2,844,523 | 3,253,830 | | Trade and other payables | 1,857,721 | 2,349,583 | | Bank borrowings | 196,778 | 39,273 | | Net assets | 8,977,358 | 8,870,796 | | Total equity | 8,977,358 | 8,870,796 | Notes to the Condensed Consolidated Financial Statements Basis of Preparation and Accounting Policies The financial statements are prepared under HKAS 34 and Listing Rules, using historical cost, consistent with prior policies, with no material impact from new HFRS revisions - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[9] - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain properties and financial instruments that are measured at revalued amounts or fair values, and the accounting policies and methods of computation are consistent with those used in the annual consolidated financial statements for the prior year[10] - The revised Hong Kong Financial Reporting Standards (HKAS 21 (Amendment) Lack of Exchangeability) applied for the first time in the current interim period had no significant impact on the Group's financial position and performance for the current and prior periods[11] Revenue and Segment Information The Group's main business is sportswear and footwear distribution and retail, plus concessionaire sales commissions, with total revenue of RMB 9,159,425 thousand for the period - The Group's principal activities are the distribution and retail of sportswear and footwear products, and earning concessionaire sales commissions by providing mall space[12] Revenue Analysis | Revenue (RMB thousands) | 2025 | 2024 | | :---------------------- | :------- | :------- | | Sales of sportswear and footwear products | 9,105,516 | 9,924,029 | | Concessionaire sales commissions | 53,909 | 59,240 | | Total Revenue | 9,159,425 | 9,983,269 | Income Tax Expense Total income tax expense for the six months ended June 30, 2025, significantly decreased to RMB 74,998 thousand, mainly due to increased deferred tax credits Income Tax Expense Details | Income Tax Expense (RMB thousands) | 2025 | 2024 | | :--------------------------------- | :------- | :------- | | PRC Enterprise Income Tax - Current period | 121,652 | 125,213 | | PRC Enterprise Income Tax - Over-provision in prior periods | (24,819) | (11,547) | | Withholding tax on dividends | 15,000 | 15,254 | | Current tax expense – total | 111,833 | 128,920 | | Deferred tax (credit) expense | (36,835) | 7,985 | | Total Income Tax Expense | 74,998 | 136,905 | Finance Costs and Profit for the Period Finance costs for the six months ended June 30, 2025, totaled RMB 28,091 thousand, mainly from lease liabilities, with profit calculated after various cost deductions Finance Costs Details | Finance Costs (RMB thousands) | 2025 | 2024 | | :---------------------------- | :------- | :------- | | Interest expense on bank borrowings | 1,482 | 1,191 | | Interest expense on advances from related parties | 47 | 50 | | Interest expense on lease liabilities | 26,562 | 34,139 | | Total Finance Costs | 28,091 | 35,380 | - Profit for the period is arrived at after charging total employee costs of RMB 1,053,815 thousand, depreciation of right-of-use assets of RMB 337,733 thousand, and depreciation of property, plant and equipment of RMB 153,813 thousand[17] - Net change in provision for inventories was RMB 18,754 thousand, which has been included in cost of sales[17] Dividends Total dividends recognized were RMB 94,736 thousand, with the Board declaring an interim dividend of HKD 0.0115 and a special dividend of HKD 0.0115 per share Dividends Recognized During the Period | Dividends (RMB thousands) | 2025 | 2024 | | :------------------------ | :------- | :------- | | 2024 final dividend | 47,368 | 56,652 | | 2024 special dividend | 47,368 | – | | Total | 94,736 | 56,652 | - The Board resolved to declare an interim dividend of HKD 0.0115 per share and a special dividend of HKD 0.0115 per share, totaling HKD 0.0230 per share, with a payout ratio of 60%[18] Earnings Per Share Profit attributable to owners was RMB 187,615 thousand, with weighted average ordinary shares of 5,183,714,855 for basic EPS and 5,195,697,858 for diluted EPS Earnings Per Share Calculation Data | Metric (RMB thousands) | 2025 | 2024 | | :--------------------- | :------- | :------- | | Profit for the period attributable to owners of the Company | 187,615 | 335,722 | Weighted Average Number of Ordinary Shares | Metric | 2025 | 2024 | | :--- | :------- | :------- | | Weighted average number of ordinary shares for the purpose of calculating basic earnings per share | 5,183,714,855 | 5,181,024,601 | | Effect of dilutive potential ordinary shares – unvested award shares | 11,983,003 | 2,662,649 | | Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share | 5,195,697,858 | 5,183,687,250 | Trade and Other Receivables and Payables As of June 30, 2025, trade and other receivables totaled RMB 918,539 thousand, while trade and other payables were RMB 684,224 thousand, with shifts in aging profiles - The Group generally grants credit periods of 30 to 60 days[22] Aging Analysis of Trade and Other Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | 0 – 30 days | 899,678 | 955,328 | | 31 – 90 days | 18,646 | 18,373 | | Over 90 days | 215 | – | | Total | 918,539 | 973,701 | Aging Analysis of Trade and Other Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | 0 – 30 days | 678,616 | 954,011 | | 31 – 90 days | – | 12,968 | | Over 90 days | 5,608 | 5,011 | | Total | 684,224 | 971,990 | Management Discussion and Analysis Business Review Amidst a volatile consumption landscape, the Group adjusted strategies, optimized inventory, and enhanced omnichannel capabilities, achieving significant growth in private domain traffic and improving consumer experience Business Environment China's consumption environment saw normalized promotions, declining physical traffic, and intensified e-commerce, impacting the Group's profitability despite GDP and retail sales growth - China's H1 GDP grew by 5.3% year-on-year, and total retail sales of consumer goods grew by 5.0%, but the footwear and apparel retail sector continued to underperform[25] - The Group dynamically adjusted promotional strategies in response to market trends, cautiously implementing orderly discounts, but declining sales volume led to operating deleverage, and increased discount rates impacted profitability[25] - The Group continuously enhanced its omnichannel capabilities, with excellent performance in private domain traffic channels, and live streaming sales recorded over 100% growth[25] Integrated Channel Management - Physical Stores Physical store traffic was weak, with same-store sales declining 10-20%, leading the Group to optimize its 3,408 direct stores in Greater China through refined retail strategies - Physical store traffic was weak, with same-store sales recording a mid-teen decline of 10% to 20%, and franchise channel performance deteriorated quarter-on-quarter[27] - As of June 30, 2025, the Group had 3,408 directly operated stores in Greater China, with a net decrease of 40 stores during the period[27][28] - The Group continued to optimize its store portfolio and enhance digital capabilities, integrating its pan-micro-store ecosystem, membership programs, and other digital services with its physical store network to enrich consumer experience, and expanded its multi-brand outlet stores 'YYsports Warehouse'[28] Integrated Channel Management - Omnichannel Omnichannel sales grew by 16%, contributing 33% to total sales, offsetting physical store weakness, with the Group leveraging its pan-micro-store ecosystem and Douyin live streaming for efficiency - The Group's omnichannel sales grew by approximately 16% year-on-year, increasing its contribution to total sales to approximately 33%, which helps efficient inventory management[30] - The pan-micro-store ecosystem, as an extension of the physical store network, drives conversion rates through quality, personalized services, and upgrades localized operations by integrating Douyin live streaming and nationwide inventory synchronization[30] Strengthening Strategic Alliances with Business Partners The Group enhanced digital membership via YYsports WeChat and live streaming, boosted member growth and sales through brand partner integration and Douyin authorization, and invested in joint marketing for improved logistics and inventory - The Group continued to empower its digital membership integration program through the YYsports WeChat mini-program and live streaming, supporting in-depth member management and promoting online-offline consumer experience[31] - By strengthening the integration with brand partner membership programs and expanding Douyin account authorizations, the Group further drove member growth and increased current season sales[31] - Continued investment in joint marketing platforms to enhance merchandise allocation and logistics management efficiency, and strengthen inventory integration plans with brand partners[32] Digital Transformation for Operational Excellence The Group advanced digital transformation by perfecting SAP system integration for business-finance optimization and upgrading business intelligence systems to enhance management decision-making and retail excellence - The Group continued to perfect the integration and upgrade of its SAP system, achieving business-finance integration and optimization, and enhancing management decision-making efficiency[33] - By integrating business intelligence systems and optimizing digital management tools, the Group can more efficiently oversee overall operations, improve in-store real-time efficiency, optimize resources, and digitally empower member services[33] Performance Analysis Revenue declined 8.3% and gross profit 10.1% due to a challenging retail environment, leading to a 41.6% drop in operating profit and a 44.1% decrease in profit attributable to owners Financial Review Revenue decreased 8.3% to RMB 9,159.4 million, gross profit fell 10.1% to RMB 3,069.2 million, and operating profit dropped 41.6% to RMB 281.6 million, impacting overall profitability - Revenue decreased by 8.3% to RMB 9,159.4 million, primarily due to a volatile retail environment, fluctuating store traffic, and deteriorating performance of franchise channels[34][35] - Gross profit was RMB 3,069.2 million, with gross profit margin decreasing by 0.7 percentage points to 33.5%, mainly affected by price competition in the retail industry and increased average discount rates[36] - Selling and distribution expenses and administrative expenses combined decreased by 5.3% year-on-year to RMB 2,890.3 million, accounting for 31.6% of total revenue[37] - Operating profit decreased by 41.6% to RMB 281.6 million, with operating profit margin decreasing by 1.7 percentage points year-on-year to 3.1%[38] - Financial income was RMB 21.6 million, and finance costs decreased by 20.6% to RMB 28.1 million, primarily benefiting from reduced interest expense on lease liabilities[39] - Profit attributable to owners of the company was RMB 187.6 million, with profit margin attributable to owners of 2.0%, a year-on-year decrease of 1.4 percentage points[40] Working Capital Efficiency Average inventory turnover was 146 days, with inventory value decreasing to RMB 4,865.4 million, while average trade receivables and payables turnover periods were 19 and 25 days, respectively - Average inventory turnover period was 146 days (H1 2024: 130 days), with less than 10% of inventories over 12 months at period-end[41] - Inventory value decreased from RMB 4,946.3 million as of December 31, 2024, to RMB 4,865.4 million as of June 30, 2025[41] - Average trade receivables turnover period was 19 days (H1 2024: 18 days), and average trade payables turnover period was 25 days (H1 2024: 32 days)[41] Liquidity and Financial Resources As of June 30, 2025, the Group maintained a robust financial position with RMB 2,694.1 million in cash, RMB 6,416.6 million in working capital, and a 2.2% gearing ratio - Bank balances and cash (including bank deposits over three months and cash and cash equivalents) reached RMB 2,694.1 million[42] - Working capital (current assets less current liabilities) was RMB 6,416.6 million[42] - Total bank borrowings were RMB 196.8 million, with a gearing ratio of 2.2% (December 31, 2024: 0.4%)[42] - Net cash generated from operating activities was RMB 399.3 million[43] Capital Expenditure Capital expenditure decreased to RMB 119.4 million, primarily for new stores, upgrades, and digital transformation, with RMB 23.5 million in contracted but unprovided capital expenditure - Total capital expenditure decreased to RMB 119.4 million (H1 2024: RMB 190.8 million)[44] - Capital expenditure covered strategic new store openings, continuous upgrades of experience-oriented physical stores, and further advancement of long-term digital transformation strategies[44] - As of June 30, 2025, capital expenditure contracted but not provided for in the consolidated financial statements related to the acquisition of property, plant and equipment was RMB 23.5 million[45] Foreign Currency Exchange The Group primarily operates in Greater China with RMB-denominated transactions, currently without foreign exchange hedging, but may use derivatives to manage future currency risks - The Group primarily operates in Greater China, with most transactions denominated in RMB[46] - As of June 30, 2025, the Group had not used foreign exchange hedging financial instruments[46] - The Group may enter into forward contracts, currency swaps, or options as needed to hedge currency risks arising from foreign currency transactions[46] Outlook and Future Developments Strategic Focus and Development Directions The Group will pursue operational excellence and digital transformation, focusing on refined retail, optimizing channels, expanding 'YYsports Warehouse', introducing new brands, and enhancing omnichannel traffic to boost competitiveness - The Group will continue to implement operational excellence and digital transformation strategies, strengthening its business model, diversifying channel mix, enhancing operational efficiency, strategically managing dynamic inventory, and efficiently managing working capital[47] - The Group will strengthen its own channel – multi-brand outlet store 'YYsports Warehouse' strategy, as an efficient channel for inventory clearance and new brand incubation[48] - The Group will expand the scale of popular Korean yoga brand XEXYMIX, open more Crocs and Pony 1972 mono-brand stores, and target the outdoor market with Dynafit[48] - The Group will strengthen omnichannel public and private domain traffic channels, including Douyin live streaming inventory synchronization, platform store cluster initiatives, instant retail, and Xiaohongshu seeding marketing[48] - The Group will continue to expand strategic cooperation with business partners, deepen inventory sharing and membership integration programs, and advance SAP system integration and optimization, leveraging upgraded business intelligence systems[49] Industry Outlook Despite challenges, the Greater China sports industry is promising, with China's sports industry value projected to reach RMB 5 trillion by 2025, driven by outdoor sports and major sporting events - The Greater China sports industry outlook remains promising, with China's sports industry value expected to expand to RMB 5 trillion by 2025[50] - The outdoor sports industry is expected to exceed RMB 3 trillion by 2025[50] - Upcoming major events such as the 2025 World Games, Women's Rugby World Cup, 2026 Winter Olympics and Paralympics, and 2026 FIFA World Cup will drive sports goods consumption growth, especially in niche and women's sports markets[50] Human Resources and Share Award Scheme Human Resources As of June 30, 2025, the Group employed approximately 19,200 staff, offering competitive remuneration, a share award scheme, and comprehensive benefits - As of June 30, 2025, the Group had approximately 19,200 employees[51] - The Group provides market-competitive remuneration, share awards, and employee benefits such as social insurance, mandatory provident fund, medical benefits, and training programs[51] Share Award Scheme The share award scheme uses existing shares, with total awards capped at 4% of issued shares; 133,721,810 shares awarded to date, with 19,200,000 unvested - The share award scheme involves existing shares only and does not involve the issuance of new shares[52] - The total number of award shares shall not exceed 4% (i.e., 213,047,184 shares) of the number of issued shares on the date of grant[52] - As of the date of this announcement, the total number of shares awarded under the share award scheme was 133,721,810 shares, representing approximately 2.51% of the issued shares[52] - For the six months ended June 30, 2025, no award shares were granted, 2,880,000 award shares lapsed or were cancelled, and 19,200,000 award shares remained unvested[53] Dividend Policy Interim and Special Dividends The Board declared an interim dividend of HKD 0.0115 and a special dividend of HKD 0.0115 per share, totaling HKD 0.0230 per share, with a 60% payout ratio - The Board resolved to declare an interim dividend of HKD 0.0115 per share (H1 2024: HKD 0.02 per share)[54] - The Board resolved to declare a special dividend of HKD 0.0115 per share (H1 2024: HKD 0.02 per share)[54] - Total dividends paid for the period were HKD 0.0230 per share, with a payout ratio of 60%[54] Closure of Register of Members The register of members will be closed from September 16 to September 18, 2025, for interim and special dividend eligibility, with transfer documents due by September 15, 2025 - The Company will suspend the registration of members from Tuesday, September 16, 2025, to Thursday, September 18, 2025[55] - To qualify for the interim and special dividends, all transfer documents must be lodged with Computershare Hong Kong Investor Services Limited not later than 4:30 p.m. on Monday, September 15, 2025[55] Dealings in Listed Securities Purchase, Sale or Redemption of Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares for the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries had purchased, sold, or redeemed any of its listed securities[56] - As at June 30, 2025, the Company did not hold any treasury shares in the Central Clearing and Settlement System or otherwise[56] Other Information Review of Accounts The Audit Committee, management, and independent auditor Deloitte Touche Tohmatsu reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025 - The Audit Committee of the Board has reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, with management and the independent auditor[57] - Deloitte Touche Tohmatsu, the independent auditor, has reviewed the Group's unaudited condensed consolidated financial information in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[57] Corporate Governance The company applied and complied with the Corporate Governance Code principles and provisions in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Company has applied the principles set out in the Corporate Governance Code in Appendix C1 to the Listing Rules and has complied with all applicable code provisions and recommended best practices[58] Standard Code for Securities Transactions by Directors The company adopted the Standard Code for Securities Transactions by Directors, and all directors confirmed compliance throughout the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as its code of conduct regarding directors’ dealings in the Company’s securities[59] - Following specific enquiry by the Company, all Directors confirmed that they had complied with the required standards set out in the Standard Code throughout the six months ended June 30, 2025[59] Publication of Results Announcement and Interim Report This announcement is published on the company and HKEX websites, with the 2025 interim report to be published and dispatched to shareholders in due course - This announcement has been published on the Company’s website (www.pousheng.com) and the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk)[60](index=60&type=chunk) - The Company’s 2025 interim report containing all applicable information required by the Listing Rules will be published on the above websites and dispatched to shareholders in due course in the manner required by the Listing Rules[60] Acknowledgements and Board of Directors Acknowledgements Chairman Mr. George Chou expressed gratitude to customers, suppliers, shareholders, fellow directors, and all employees for their support and dedicated service - Mr. George Chou, the Chairman, sincerely thanked all customers, suppliers, and shareholders for their support, and fellow directors for their valuable contributions and all employees of the Group for their full commitment and dedicated service during the period[61][62] Board of Directors As of the announcement date, the Board comprises non-executive, executive, and independent non-executive directors, including Chairman Mr. George Chou, CEO Ms. Sharon Chang, and CFO Mr. Jason Chen - The Board of Directors includes Non-executive Directors Mr. George Chou (Chairman), Ms. Patty Tsai, and Mr. Lee Yi-Nan[64] - Executive Directors include Mr. Hu Chia-Ho, Ms. Sharon Chang (Chief Executive Officer), and Mr. Jason Chen (Chief Financial Officer)[64] - Independent Non-executive Directors include Mr. Chen Huan-Chung, Mr. Fung Raymond, and Mr. Liu Shih-Liang[64]