Group 1 - The company achieved a revenue growth of 15.3% in the first half of the year, exceeding market expectations despite a challenging trade environment and weak domestic apparel consumption [1] - The revenue growth is primarily attributed to an increase in market share among major clients in the sports and leisure brand segments, with sales growth rates for the top four clients reaching 27%, 6%, 28%, and 15% respectively [1] - Although the gross margin declined by 1.9 percentage points year-on-year due to rising labor costs, the company still managed to achieve an 8.4% growth in net profit attributable to shareholders, supported by rapid revenue growth, effective cost control, and increased government subsidies and foreign exchange gains [1] Group 2 - The company is recognized as a leading global manufacturer in the sports apparel sector, with core competencies in globalized and integrated forward-looking layouts, as well as strong manufacturing, research, and management capabilities [2] - The company continues to expand and upgrade its integrated production capacity in Vietnam, Cambodia, and domestically, reinforcing confidence in its long-term sustainable growth [2] - Earnings forecasts for 2025-2027 have been slightly adjusted, with expected earnings per share of 4.37, 4.88, and 5.60 yuan respectively, and a DCF target valuation of 85.09 HKD [2]

Investment Rating - The report maintains a "Buy" rating for the company [3][5][9] Core Views - The company achieved a remarkable revenue growth of 15.3% in the first half of the year, surpassing market expectations despite a challenging trade environment and weak domestic apparel consumption [8] - The company's gross margin decreased by 1.9 percentage points year-on-year due to rising labor costs, but net profit attributable to the parent company still grew by 8.4% [8] - The company's core competitiveness lies in its global and integrated business model, which has allowed it to increase market share among major clients and expand its customer base [8] Financial Performance Summary - Revenue (in million) for 2023A is 24,970, with a year-on-year decline of 10.1%, and projected revenues for 2024A, 2025E, 2026E, and 2027E are 28,663, 32,205, 36,134, and 40,567 respectively, showing growth rates of 14.8%, 12.4%, 12.2%, and 12.3% [4] - Operating profit (in million) for 2023A is 4,996, with a year-on-year decline of 5.1%, and projected operating profits for 2024A, 2025E, 2026E, and 2027E are 7,164, 7,557, 8,455, and 9,717 respectively, indicating growth rates of 43.4%, 5.5%, 11.9%, and 14.9% [4] - Net profit attributable to the parent company (in million) for 2023A is 4,557, with a year-on-year decline of 0.1%, and projected net profits for 2024A, 2025E, 2026E, and 2027E are 6,241, 6,575, 7,339, and 8,415 respectively, showing growth rates of 36.9%, 5.4%, 11.6%, and 14.7% [4] - Earnings per share (in yuan) for 2023A is 3.03, with projections for 2024A, 2025E, 2026E, and 2027E being 4.15, 4.37, 4.88, and 5.60 respectively [4] Valuation Summary - The DCF target valuation is set at 85.09 HKD, with the current share price at 58 HKD [3][5][9] - The company’s price-to-earnings ratio (P/E) for 2025E is projected at 12.1, and the price-to-book ratio (P/B) is projected at 2.0 [4]