Core Viewpoint - Tianfeng Securities maintains an "overweight" rating for Jiu Xing Holdings based on its performance in the first half of 2025, adjusting profit forecasts due to last year's high base effect and operational efficiency from new capacity deployment [1] Group 1: Financial Performance - The expected net profits for 2025-2027 are $160 million, $180 million, and $190 million, respectively, down from previous estimates of $180 million, $200 million, and $220 million [1] - Earnings per share (EPS) are projected to be $0.20, $0.21, and $0.23 for the same period, revised from $0.22, $0.24, and $0.26 [1] Group 2: Strategic Planning - The company is currently in a stable position, a direct result of its three-year plan (2023-2025), which aims to improve product category mix, diversify and expand the customer base, and optimize manufacturing base layout [1] - The company has set two main profit targets: achieving a 10% operating profit margin and a low double-digit annual growth rate in after-tax profits over the three-year period [1] - The company is confident in achieving these targets by the end of 2025, having already exceeded them in 2023 and 2024 [1] Group 3: Operational Challenges - The company faces short-term challenges in profitability due to two main factors: a high base effect from customers advancing orders to meet demand before the Paris Olympics and operational efficiency issues related to increased capacity in Indonesia and the Philippines [2] - To meet demand and ensure customer goals, the company has shifted some production to its factory in Vietnam, resulting in increased costs, including overtime expenses [2] - Despite initial challenges, the company expects conditions to improve in the second half of the year [2] Group 4: Future Growth Plans - As the company prepares to finalize its next three-year plan (2026-2028), it remains on a growth trajectory [2] - The new plan includes expanding total capacity by 20 million pairs, enhancing production at the new factory in Solo, Indonesia, launching operations at a second factory in Bangladesh, and accelerating the construction of a dedicated factory for its largest sports client in Indonesia [2] - Another focus of the upcoming three-year plan is to develop the handbag and accessories manufacturing business, which the company aims to establish as a significant long-term growth driver [2] - The company has recently acquired a small but experienced handbag factory in Vietnam to improve product quality and production efficiency in its handbag business [2] - The next three-year plan will enable the company to meet cross-product category demands from brand customers, positioning itself as an ideal partner that combines high-quality standards with added value [2]