Core Viewpoint - Huali Group (300979) recently conducted a significant investor survey, attracting attention from over 60 institutions, focusing on various operational aspects and market conditions affecting the company. Group 1: Investor Activity - The investor activity included specific object surveys and analyst meetings held on August 21 and 22, 2025, conducted online via Tencent Meeting and offline in Shenzhen [1] - Participating institutions included major securities firms and investment funds such as Tianfeng Securities, Morgan Stanley, and Goldman Sachs, among others [1] - The company was represented by its board secretary, Fang Lingling, during the survey [1] Group 2: Key Operational Insights - The U.S. market accounts for approximately 40% of the company's sales revenue, with recent increases in U.S. import tariffs impacting customer costs for U.S. sales, while non-U.S. regions remain unaffected [1] - The overall gross margin declined in the first half of the year due to new factory ramp-up and capacity adjustments, with expectations for improvement as new and old brand order growth rates converge [1] - The company’s new factory in Vietnam has achieved profitability in Q2, with gross margins improving compared to Q1 [1] Group 3: Supply Chain and Production - In the first half of 2025, about 56% of the raw materials for the Vietnam factory were sourced locally, with additional procurement from mainland China, Taiwan, and South Korea [1] - The company has a flexible production capacity that adjusts annually based on orders, with specific targets set according to factory stages and order types [1] - The company produces its own midsole and outsole for sports shoes, with a dedicated factory for shoe soles and molds [1] Group 4: Financial and Tax Considerations - In the first half of 2025, the company recorded a 66 million asset impairment for inventory write-downs and a 4.8 million credit impairment for bad debts [1] - The company plans to invest approximately 1.1 to 1.7 billion RMB annually in capital expenditures from 2022 to 2024, focusing on new factories in Indonesia and Vietnam and accelerating automation [1] - The company emphasizes shareholder returns, maintaining a significant dividend payout ratio while balancing development and operational funding needs [1]