(Incorporated in Hong Kong with limited liability) （於香港註冊成立之有限公司） Chervon Holdings Limited 泉峰控股有限公司 24 September 2025 (Stock Code：2285) (股份代號:2285) Chervon Holdings Limited (the "Company") – Notification of publication of 2025 Interim Report (the "Current Corporate Communications") We wish to notify you that the Current Corporate Communication of the Company is available in printed English and Chinese versions. It is also available in electronic version on the Company's website at https://global.chervongrou ...

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the next six months [2][45]. Core Viewpoints - The company has established a diversified product matrix in the tool industry, enhancing its manufacturing capabilities through acquisitions and restructuring, and is positioned for global expansion [5][10]. - The tool industry is mature with stable long-term demand, driven by active housing markets and industrial production expansion, with a projected global market size of $67.3 billion by 2026 [17][20]. - The company is actively responding to trade environment changes by implementing an international strategy since 2018, establishing a global supply chain and production bases [28][29]. - Despite a complex market environment, the company has built core competitiveness through optimized capacity layout, product innovation, and brand channel development [45]. Summary by Sections 1. Business Situation - The company achieved a revenue of 7.027 billion yuan in H1 2025, a year-on-year increase of 4.87%, and a net profit of 1.273 billion yuan, up 6.63% [10][14]. - The revenue distribution in H1 2025 was 65% from the US, 25.66% from Europe, and 4.96% from other regions [10]. 2. Industry Overview - The tool industry is characterized by stable demand, with a projected CAGR of 4% from 2024 to 2026 [17][20]. - The market is expected to see growth in segments like smart electric tools, driven by technological advancements [17]. 3. Company Competitiveness - The company has established 23 production bases globally and is investing in new facilities in Vietnam and Thailand [28][29]. - It has a strong focus on innovation, with significant R&D investments leading to a diverse product line exceeding 30,000 SKUs [31][32]. 4. Financial Performance - The company reported a net profit of 8.12 billion yuan in Q2 2025, reflecting a 4.08% increase year-on-year despite a slight revenue decline [35]. - The asset-liability ratio stands at 19.06%, indicating a low debt level and financial flexibility [35]. 5. Profit Forecast and Valuation - The company is expected to achieve revenues of 16.336 billion yuan, 18.747 billion yuan, and 21.714 billion yuan from 2025 to 2027, with corresponding net profits of 2.622 billion yuan, 3.057 billion yuan, and 3.587 billion yuan [3][45]. - The projected EPS for 2025, 2026, and 2027 are 2.20 yuan, 2.56 yuan, and 3.00 yuan, respectively, with a corresponding PE ratio decreasing from 15.21 to 11.12 [3][45].

Core Viewpoints - The company's own brand business remains strong, with revenue growth driven by customer stocking and pre-orders in Q1 2025, leading to an increase in operating net profit margin and a 54.61% year-on-year profit growth due to one-time gains from the divestiture of Quan Feng Automotive [1] - The company is actively expanding production capacity in Vietnam to mitigate tariff risks, and the anticipated improvement in terminal demand during the US interest rate cut cycle is expected to benefit the company's brands, particularly EGO [1][4] Revenue and Profit Performance - In H1 2025, the company achieved revenue of $912 million, a year-on-year increase of 11.85%, with profit reaching $95.271 million, up 54.61% [1][2] - The OBM business revenue grew by 16.2%, accounting for 77.5% of total revenue, with OPE revenue at $602 million, a 22.8% increase, primarily driven by EGO [2][3] - The company’s gross margin improved to 33.31%, up 0.37 percentage points year-on-year, attributed to the higher proportion of the high-margin EGO brand and a decrease in raw material costs [3] Regional Revenue Breakdown - North America showed strong demand with H1 2025 revenue of $651 million, a 17.9% increase, while Europe and China saw modest growth and decline, respectively [2] - Revenue from China decreased by 8.4% to $59 million, indicating market challenges [2] Cost and Profitability Analysis - The company’s total expense ratio was 24.02%, up 0.93 percentage points year-on-year, with specific increases in sales and management expenses [3] - Adjusted net profit for H1 2025 was $76.031 million, a 23.39% increase, with an adjusted net profit margin of 8.33% [3] Strategic Initiatives - The company is accelerating the transfer of production capacity from Nanjing to Vietnam to reduce the impact of US-China trade tariffs, with significant capacity increases expected in H2 2025 [4] - The relocation of the Steinheim factory from Germany to Nanjing is anticipated to be completed by the end of 2025, enhancing long-term competitiveness [4] Future Outlook - Revenue projections for 2025-2027 are $2.020 billion, $2.266 billion, and $2.526 billion, with year-on-year growth rates of 13.91%, 12.17%, and 11.43% respectively [4] - Expected net profits for the same period are $126 million, $158 million, and $191 million, with corresponding growth rates of 11.95%, 25.68%, and 20.99% [4]

Investment Rating - The report maintains a positive outlook on the consumer sector, particularly focusing on leading companies in the Hong Kong stock market [1]. Core Insights - The consumer sector's performance has shown a significant recovery, with a 55.8% increase over the past 12 months, indicating strong growth potential [3]. - The report highlights the importance of consumption support policies introduced recently, which are expected to stabilize consumption growth in the upcoming quarters [7]. - Key recommendations include focusing on undervalued leading companies and sectors with significant growth potential, such as snacks, beverages, and health products [8][9]. Industry Overview - The consumer sector comprises 1,214 listed companies, with a total market capitalization of 18,636.7 billion and a circulating market value of 17,056.8 billion [1]. - The retail sales growth rate for August was 3.4%, slightly lower than expected, but the overall trend is expected to improve due to upcoming holidays and promotional events [6][7]. - The beverage sector is highlighted for its strong performance, particularly companies like Nongfu Spring, which saw over 30% sales growth in August [8]. - The snack sector is also recommended, with companies like Wei Long benefiting from back-to-school stocking, showing a 20-25% increase in sales [8]. - The health product sector is projected to grow, with companies like H&H International Holdings expected to see an upward revision in profit forecasts [8][9]. Company Recommendations - The report recommends focusing on leading companies such as Nongfu Spring in the beverage sector and Wei Long in the snack sector, both of which are expected to perform well in the near term [8][9]. - Traditional consumer leaders like Haitian Flavoring and Li Du are also highlighted for their growth potential and strategic initiatives [9]. - In the electronics sector, companies like Yadi Holdings and Aima Technology are recommended due to their low valuation and growth prospects [12]. Market Trends - The report notes a shift in consumer preferences towards high-quality and innovative products, particularly in the health and wellness sectors [18]. - The overall market sentiment is cautiously optimistic, with expectations of gradual recovery in consumer spending supported by government policies [7][18].

Core Viewpoint - The company reported a strong performance in H1 2025, with revenue and net profit growth driven by the OPE business and North American market demand [1][2]. Revenue Performance - In H1 2025, the company achieved revenue of $910 million, a year-on-year increase of 11.9%, primarily due to robust end-user sales and pre-orders related to US-China tariff tensions [1]. - The OPE segment showed significant growth, with revenue rising 22.8% to $602 million, while the electric tools segment experienced a slight decline of 2.5% [1]. - The company's own brand (OBM) business continued to perform well, with revenue increasing 16.2%, accounting for 77.5% of total revenue [1]. - North America was the main growth driver, with revenue increasing by 17.9% [1]. Profitability Metrics - The company reported an adjusted net profit of $76.03 million in H1 2025, a year-on-year increase of 23.4%, reflecting solid core operating performance [2]. - The gross margin improved to 33.3%, up 0.4 percentage points year-on-year, attributed to a higher sales proportion of high-margin EGO products, lower raw material costs, and price increases [2]. - Selling expenses increased due to marketing and channel expansion investments, while R&D expenses grew by 6.8% year-on-year [2]. Strategic Initiatives - The company completed the sale of its stake in Qianfeng Automotive, focusing on its core OPE and electric tools business [3]. - To mitigate external risks, the company is accelerating the transfer of some production capacity from Nanjing to Vietnam, aiming to avoid US-China trade tariffs and enhance long-term operational efficiency [3]. - Capital expenditures in the reporting period amounted to $56.3 million, primarily for land acquisition for the Vietnam factory [3]. - Inventory turnover days improved from 178 days in the previous year to 161 days, indicating a healthy inventory situation [3]. Future Outlook - The company is well-positioned to capitalize on opportunities in the lithium OPE sector, supported by a strong brand matrix and ongoing investments in smart and robotic technologies [3]. - The company adjusted its EPS forecasts for 2025 and 2026 to $0.27 and $0.34, respectively, and introduced a new forecast for 2027 at $0.38, corresponding to PE ratios of 10.5, 8.3, and 7.4 times [3]. - A target price of HKD 27.5 was set based on DCF valuation, indicating strong long-term growth potential [3].

Key Points - The top three stocks with net inflow of southbound funds are Alibaba-W (09988) with 5.278 billion, Yingfu Fund (02800) with 2.782 billion, and Hang Seng China Enterprises (02828) with 1.566 billion [1] - The top three stocks with net outflow of southbound funds are Xiaomi Group-W (01810) with -0.721 billion, Innovent Biologics (01801) with -0.466 billion, and Pop Mart (09992) with -0.458 billion [1] - In terms of net inflow ratio, Yuexiu Transportation Infrastructure (01052) leads with 63.76%, followed by Crystal International (02232) with 56.34%, and China Resources Gas (01193) with 53.63% [1] - The stocks with the highest net outflow ratio include QuanFeng Holdings (02285) at -59.36%, Yadea Group (01585) at -54.53%, and TCL Electronics (01070) at -54.28% [1] Net Inflow Rankings - The top ten stocks by net inflow include Alibaba-W (09988) with 5.278 billion, Yingfu Fund (02800) with 2.782 billion, and Hang Seng China Enterprises (02828) with 1.566 billion [2] - Other notable stocks in the net inflow list are Meituan-W (03690) with 0.670 billion and Southern Hang Seng Technology (03033) with 0.620 billion [2] Net Outflow Rankings - The top ten stocks by net outflow include Xiaomi Group-W (01810) with -0.721 billion, Innovent Biologics (01801) with -0.466 billion, and Pop Mart (09992) with -0.458 billion [2] - Other significant stocks in the net outflow list are Li Auto-W (02015) with -0.298 billion and China Construction Bank (00939) with -0.254 billion [2] Net Inflow Ratio Rankings - The top three stocks by net inflow ratio are Yuexiu Transportation Infrastructure (01052) at 63.76%, Crystal International (02232) at 56.34%, and China Resources Gas (01193) at 53.63% [3] - Additional stocks with high net inflow ratios include China Ship Leasing (03877) at 49.13% and Jiangsu Ninghu Expressway at 45.49% [3] Net Outflow Ratio Rankings - The stocks with the highest net outflow ratios include QuanFeng Holdings (02285) at -59.36%, Yadea Group (01585) at -54.53%, and TCL Electronics (01070) at -54.28% [3] - Other notable stocks with significant net outflow ratios are Kangji Medical (09997) at -53.77% and QiuTai Technology (01478) at -47.17% [3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 27.5 [2][9] Core Insights - The company reported a revenue of USD 910 million for the first half of 2025, representing a year-on-year increase of 11.9%, and a net profit of USD 95 million, up 54.6% year-on-year [2][9] - The growth in revenue is primarily driven by strong terminal sales and pre-orders due to the US-China tariff tensions, with the OPE segment showing a remarkable revenue increase of 22.8% to USD 602 million [9] - The adjusted net profit for the first half of 2025 was USD 76.03 million, reflecting a 23.4% year-on-year growth, supported by an increase in gross margin to 33.3% [9] Financial Performance Summary - Revenue projections for the upcoming years are as follows: - 2024: USD 1,774 million - 2025: USD 2,000 million - 2026: USD 2,230 million - 2027: USD 2,447 million - The expected year-on-year growth rates are 28.6% for 2024, 12.7% for 2025, 11.5% for 2026, and 9.7% for 2027 [4][10] - The net profit forecast is: - 2024: USD 112 million - 2025: USD 138 million - 2026: USD 174 million - 2027: USD 197 million [4][10] Strategic Developments - The company has divested from non-core assets, focusing on its main business areas, which include OPE and power tools, and is accelerating the transfer of some production capacity to Vietnam to mitigate trade risks [9] - Capital expenditures for the reporting period amounted to USD 56.3 million, primarily for land acquisition for the Vietnam factory [9] - The company has improved its operational efficiency, with inventory turnover days decreasing from 178 days to 161 days year-on-year [9]

Core Viewpoint - The stock of QuanFeng Holdings (02285) has risen over 6%, currently at 21.98 HKD, driven by positive market sentiment and analyst upgrades regarding its growth potential in the U.S. real estate market recovery and export capacity from Vietnam [1] Group 1: Analyst Insights - Xingzheng International has released a report expressing optimism about QuanFeng Holdings as a premium overseas brand, highlighting a dual resonance opportunity in the U.S. real estate market's 30-year recovery and a 5-year inventory cycle, predicting accelerated demand growth over the next 2-3 years [1] - Daiwa recently noted that QuanFeng's investor day emphasized a high-profit EGO brand strategy, with management expecting that by the end of this year, Vietnamese production capacity will meet 60% of the product demand for exports to the U.S., which may alleviate market concerns regarding long-term tariff impacts and competition [1] Group 2: Financial Performance and Projections - Daiwa has significantly revised its target price for QuanFeng Holdings from 11 HKD to 25 HKD, reflecting the company's strong performance in the first half of the year, which exceeded expectations [1] - The upgrade in rating to "outperform" is based on the company's high concentration of production in China, which was a key factor in Daiwa's previous lower forecasts following the announcement of reciprocal tariff measures by the Trump administration in April [1]

Core Viewpoint - The stock of QuanFeng Holdings (02285) has risen over 6%, currently at 21.98 HKD, driven by positive market sentiment and favorable research reports highlighting its potential in the U.S. real estate recovery and export capacity from Vietnam [1] Group 1: Company Performance - QuanFeng Holdings' stock increased by 6.57%, with a trading volume of 71.268 million HKD [1] - The company is viewed as a high-quality overseas brand, benefiting from a dual resonance opportunity in the U.S. real estate market and a 5-year inventory cycle [1] Group 2: Market Outlook - According to Xingsheng International, demand is expected to accelerate over the next 2-3 years, with Vietnam's export capacity to the U.S. anticipated to cover demand by next year, leading to a recovery in profit margins [1] - Daiwa recently raised its target price for QuanFeng from 11 HKD to 25 HKD, reflecting the company's strong performance in the first half of the year, and upgraded its rating to outperform the market [1] Group 3: Strategic Initiatives - During a recent investor day, QuanFeng's management emphasized a high-profit strategy centered around the EGO brand, projecting that by the end of this year, 60% of its products exported to the U.S. will be sourced from Vietnam [1] - The company aims to alleviate market concerns regarding long-term tariff impacts and competition, especially following the significant adjustments made by the Trump administration in April regarding tariff measures [1]

Group 1 - The core viewpoint is that Xingsheng International is optimistic about Quan Feng Holdings (02285) as a high-quality overseas brand, benefiting from the dual resonance of the current 30-year recovery in the US real estate market and the left side of the 5-year inventory cycle, with expected demand growth in the next 2-3 years [1] - The company is expected to see a recovery in profit margins as its export capacity to the US from Vietnam will be largely covered by next year, indicating strong demand-side growth [1] - The firm maintains a "buy" rating, forecasting revenue growth of +3.6% in 2025, +12.0% in 2026, and +8.5% in 2027, with adjusted net profit changes of -3.0% in 2025, +3.3% in 2026, and +23.7% in 2027 [1] Group 2 - In the first half of 2025, the company reported revenue of $912 million, a year-on-year increase of 11.9%, driven by strong demand for its proprietary brand EGO and preemptive stocking by North American clients in response to tariffs [2] - The sales of outdoor power equipment reached $602 million, up 22.8% year-on-year, while electric tools sales declined by 2.5% to $306 million, primarily due to reduced OEM orders and weak demand in the Chinese real estate market [2] - The company's gross margin improved to 33.3%, up 0.4 percentage points year-on-year, attributed to a higher proportion of high-margin EGO revenue, lower raw material costs, and favorable exchange rates [2]