Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported Q1 2025 revenue and net profit attributable to shareholders of $202.9 million and $7.6 million, respectively, showing a year-on-year growth of 1.3% and a decline of 24.2%, which was below market expectations [2] - The decline in net profit was primarily due to uneven capacity utilization across manufacturing plants, inefficiencies in production, and rising labor costs due to increased hiring and wage inflation [2] - The manufacturing ASP (Average Selling Price) turned positive after five consecutive quarters of decline, driven by a favorable order mix [3] - The retail business saw a further decline in revenue in April 2025, with a year-on-year decrease of 7.7% [4] - The company is positioned as a global leader in athletic shoe manufacturing, benefiting from a strong market share among top sports brands and a vertically integrated supply chain [5] Summary by Sections Financial Performance - Q1 2025 manufacturing revenue and net profit were $132.8 million and $6.4 million, respectively, with year-on-year changes of +5.9% and -24.6% [3] - The gross margin for Q1 2025 was 17.7%, a decrease of 2.6 percentage points year-on-year, attributed to uneven capacity utilization and rising labor costs [3] - The company forecasts revenue for 2025-2027 to be $8.69 billion, $9.09 billion, and $9.43 billion, respectively, with a downward adjustment in net profit estimates to $460 million, $520 million, and $560 million [5][7] Retail Business - The retail segment reported Q1 2025 revenue and net profit of $51.07 million and $1.38 million, respectively, reflecting a year-on-year decline of 5.4% and 20.7% [4] - The number of direct-operated stores decreased by 1.3% year-on-year to 3,437, with 11 stores closed compared to the end of 2024 [4] Investment Outlook - Short-term challenges include potential impacts from tariffs and inflation on consumer confidence, particularly affecting Q3 orders [5] - The company is expected to maintain low to mid-single-digit growth in orders for the year, supported by capacity expansion and positive price growth [5] - Long-term, the company has room for improvement in net profit margins compared to peers [5]
裕元集团（00551）：Q1毛利率受产能负载不均及工费影响，ASP转正