Financial Performance - For the six months ending September 30, 2025, the company reported revenue of HKD 2,831 million, reflecting a 9.0% increase compared to the previous period[14]. - The gross profit for the same period was HKD 611.2 million, with a gross margin of 21.6%[8]. - The profit attributable to the company's owners was HKD 336.0 million, representing a profit margin of 11.9%[10]. - Adjusted net profit for the period was HKD 342.9 million, maintaining an adjusted net profit margin of 11.9%[12]. - The company's revenue for the six months ended September 30, 2025, increased by 1.6% to HKD 2,830.5 million from HKD 2,786.2 million in the same period of 2024[29]. - Operating profit rose by 5.1% to HKD 410.3 million, while net profit for the period increased by 7.1% to HKD 335.1 million, marking a new high for the half-year[23]. - The total comprehensive income for the six months ended September 30, 2025, was HKD 288,430,000, compared to HKD 240,085,000 for the same period in 2024, reflecting an increase of approximately 20.1%[95]. - The company's profit attributable to owners for the six months ended September 30, 2025, was HKD 335,951,000, compared to a profit of HKD 298,185,000 for the same period in 2024, representing an increase of approximately 12.7%[124]. Revenue Sources - The company experienced a 9.0% increase in textile and apparel exports from Vietnam, while exports from mainland China decreased by 2.6%[19]. - Revenue from the European, North American, and Japanese markets accounted for 22.7%, 20.5%, and 17.7% of total revenue, respectively, indicating a balanced sales distribution across major markets[31]. - Revenue from Japan decreased to HKD 501,427,000 in 2025 from HKD 592,102,000 in 2024, a decline of about 15.4%[113]. - Revenue from North America increased significantly to HKD 579,414,000 in 2025, up 32% from HKD 439,339,000 in 2024[113]. - The five largest customers accounted for approximately 67.6% of total revenue in 2025, down from 69.1% in 2024[115]. Operational Strategies - The company plans to invest in new production lines in Vietnam, aiming to become the first cashmere yarn manufacturer in Southeast Asia by Q4 of the 2026 fiscal year[20]. - The company has diversified its supply chain by inviting key suppliers to establish bases near its production facilities in Vietnam, enhancing its competitive advantage[20]. - The company is adapting to the changing economic landscape by implementing risk management strategies and exploring new product categories[20]. - The company anticipates that the new production line in Vietnam will enhance its ability to serve global customers rapidly[20]. - The strategy in the cashmere yarn sector focuses on sustainability and traceability, with plans to relocate part of the cashmere yarn business to Vietnam[24]. - The company is enhancing its operational efficiency, particularly in its production facilities in Vietnam, to adapt to changing market dynamics[24]. - The management emphasizes flexibility in operations and is committed to strengthening core business while exploring new opportunities[26]. Cash Flow and Financial Position - Cash flow remains strong, supported by prudent cash management and a solid balance sheet[23]. - The net cash generated from operating activities for the six months ended September 30, 2025, was HKD 261.8 million, significantly up from HKD 106.5 million in the same period of 2024[45]. - The net cash used in investing activities for the six months ended September 30, 2025, was HKD 134.8 million, primarily due to the acquisition of property, plant, and equipment amounting to HKD 138.4 million[46]. - The net cash generated from financing activities for the six months ended September 30, 2025, was HKD 55.9 million, mainly due to a net increase in bank borrowings of HKD 151.0 million[47]. - Cash and cash equivalents increased by HKD 182.8 million, rising from HKD 430.8 million at the beginning of the period to HKD 613.6 million at the end[48]. - The group's debt-to-equity ratio decreased from 20.1% as of March 31, 2025, to 18.9% as of September 30, 2025[49]. - Total capital expenditure for the six months ended September 30, 2025, was approximately HKD 250.7 million, primarily related to machinery procurement and the construction of a new production base in Vietnam[51]. Shareholder Information - The company declared an interim dividend of HKD 0.11 per share, with a payout ratio of 75%[23]. - The interim dividend declared for the six months ending September 30, 2025, is HKD 0.11 per share, an increase from HKD 0.098 per share in 2024[65]. - The total number of issued ordinary shares as of September 30, 2025, is 2,279,392,000 shares[72]. - The company has a significant shareholder, Mr. Wang Tingzhen, holding 1,500,000,000 shares, representing 65.81% of the issued share capital[71]. - Major shareholders include Nanxuan Investment Limited and Tinghuai Asset Limited, each holding 1,500,000,000 shares, representing 65.81% of the issued share capital[74]. - The company has a significant concentration of ownership, with Wang Kam Chu holding 1,700,000,000 shares, representing 74.58% of the issued share capital[74]. Human Resources and Governance - The company emphasizes the importance of human resource management in maintaining and enhancing its expertise in knitted product manufacturing[63]. - The remuneration policy for directors and senior management is linked to the company's performance and is regularly reviewed against market salary levels[64]. - The company has implemented training programs for new employees to ensure continuous development and skill enhancement[63]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules and has complied with all mandatory provisions as of September 30, 2025[66]. - The audit committee, consisting of four independent non-executive directors, reviewed the interim financial report for the six months ending September 30, 2025[69]. Accounting and Compliance - The company has not applied any new accounting standards or interpretations that have not yet come into effect during the reporting period[101]. - The fair value of financial instruments is determined based on observable market data, with Level 1 instruments being valued at current bid prices[105]. - The group has a maximum credit risk exposure of HKD 538,417,000 related to trade receivables as of September 30, 2025, with no collateral held[130]. - The company continues to comply with the listing rules regarding connected transactions as per Chapter 14A[147].
南旋控股(01982) - 2026 - 中期财报