1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The report focuses on the in - depth analysis of Henghui Safety Protection's business situation through a performance briefing and Q&A session. The company shows a positive development trend in various projects, with a clear strategic layout and strong potential for growth [23]. 3. Summary by Related Catalogs 3.1. Research Basic Situation - The research object is Henghui Safety Protection, belonging to the textile and apparel industry. The reception time was on September 12, 2025. The listed company's reception personnel included the chairman, general manager, deputy general manager, board secretary, financial director, independent director, and continuous supervision sponsor representative [16]. 3.2. Detailed Research Institutions - The reception object was all investors participating in the company's 2025 semi - annual performance briefing online, and the reception object type was "other" [19]. 3.3. Research Institution Proportion No relevant content provided. 3.4. Main Content Data 3.4.1. Business Performance and Dividends - In the first half of 2025, the company achieved an operating income of 593.0299 million yuan, a year - on - year increase of 15.43%; the net profit attributable to shareholders of the listed company was 54.9774 million yuan, a year - on - year increase of 11.82%. As of June 30, 2025, the company's total assets were 2.584816 billion yuan, a year - on - year increase of 3.10%; the owner's equity attributable to shareholders of the listed company was 1.4620966 billion yuan, a year - on - year increase of 20.29%. - The company's 2025 interim profit distribution plan is to distribute a cash dividend of 0.8 yuan per 10 shares (tax - inclusive) to all shareholders based on the total share capital of 170,885,078 shares after deducting the shares held in the repurchase special account, with a total cash dividend of 13.67080624 million yuan, accounting for 29.65% of the parent company's distributable profit for the year [23]. 3.4.2. Project Progress - The "Annual Production of 72 million dozen Functional Safety Gloves" project of the subsidiary Hengyue Factory contributed about 4.5 million dozen of production capacity in the first half of the year, and the company aims to achieve a breakthrough of 10 million dozen in both production capacity and sales volume for the whole year. The project is expected to take 3 - 5 years to fully release production capacity and adapt to the market after full operation [25]. - The "Annual Production of 1.6 million dozen Functional Safety Gloves" project of the Vietnam factory has made key progress. The first PU glove production line has been commissioned and put into mass production, and other product lines are in the process of accelerated installation, commissioning, and trial production. The first batch of products has been successfully delivered recently. It is expected that in the next 3 - 6 months, the production capacity will be gradually released, and the capacity utilization rate will increase steadily [26]. - The company's planned "Annual Production of 110,000 tons of Biodegradable Polyester Rubber" project is being advanced in a "one - time planning, three - phase construction" mode. The first - phase 10,000 - ton project started in August 2024 and is progressing steadily [28]. - The "Annual Production of 4,800 tons of Ultra - high - molecular - weight Polyethylene Fiber" project funded by convertible bonds is advancing as planned. The indoor and outdoor pipe networks and public auxiliary projects are under accelerated construction, and key production equipment has been installed. The company aims to achieve trial production by the end of September [29]. 3.4.3. Market and Orders - The company's functional safety glove business is mainly for export. In the first half of 2025, North American sales revenue accounted for 37.85% of total revenue (31.24% from the US). To deal with tariffs, the company is promoting the construction of the Vietnam factory and implementing a diversified market strategy [25]. - Since the second quarter, the company's safety glove orders have shown regional differentiation. In the US market, orders have slowed down, but are expected to recover as inventory is digested. Outside the US, orders are in line with expectations [27]. 3.4.4. Product Application and R & D - The company is developing ultra - high - molecular - weight polyethylene fiber for use in robots, such as in flexible joint protection parts and dexterous hand tendon ropes. Some products have been delivered, and the company is in communication with several robot companies [30]. - The company's ultra - high - molecular - weight polyethylene fiber has obtained small - batch orders in the aerospace and marine fields and is continuing to deepen technology - market integration [36]. 3.4.5. Company Strategy - The company adheres to its main business and focuses on transforming the production capacity of existing and under - construction projects into effective orders. It also tracks industry trends and expands its product portfolio through innovation [32]. - The company is using its Hong Kong subsidiary as a pivot to promote the Vietnam project. Other overseas investment plans will be evaluated based on market demand, trade environment, and production capacity planning [32].

Core Insights - China's foreign trade has shown resilience and growth despite challenging external conditions, with total import and export volume reaching 20 trillion yuan, a historical high for the same period, and a year-on-year growth rate of 2.9% in the first half of the year [1] Group 1: Industry Performance - The export of electromechanical products increased by 9.5%, accounting for 60% of total exports, indicating a rise in the "gold content" of Chinese manufacturing [2] - High-end equipment related to new productive forces saw growth exceeding 20%, while "new three types" products representing green and low-carbon initiatives grew by 12.7% [2][3] - The aviation maintenance sector has benefited from streamlined customs processes, reducing aircraft downtime by 1 to 2 days and cutting customs clearance time by over 25% [4] Group 2: Policy Support - Major e-commerce platforms and retail enterprises have established "direct sales channels" to assist export-oriented companies facing obstacles [5] - The introduction of the "Yipay" platform has improved payment processing for exporters, enhancing trust and facilitating quicker transactions [7] - The government has implemented various measures to promote trade liberalization and reduce logistics costs, including replicating successful pilot measures from the Shanghai Free Trade Zone [8] Group 3: Market Diversification - Companies are increasingly participating in international exhibitions to secure overseas orders, reflecting a shift towards proactive market expansion strategies [7] - The integration of digital trade innovations and regional economic cooperation is helping to build a more resilient global supply chain network [7] - The confidence of export and import enterprises has been rising for two consecutive months, indicating a positive outlook for trade development [6]

Core Insights - China's foreign trade has shown resilience in the face of a challenging external environment, achieving a record high of 20 trillion yuan in import and export scale, with a year-on-year growth rate of 2.9% in the first half of the year [1] Group 1: Trade Performance - The export of electromechanical products increased by 9.5%, accounting for 60% of total exports, indicating a rise in the quality of Chinese manufacturing [2] - High-end equipment related to new productive forces saw growth exceeding 20%, while "new three samples" products, representing green and low-carbon initiatives, grew by 12.7% [2][3] Group 2: Policy Support - The implementation of a full-process customs clearance model by Xiamen Customs has significantly reduced aircraft maintenance turnaround times by 1 to 2 days and customs clearance times by over 25% [4] - Major e-commerce platforms have established "direct sales channels" to assist export-restricted companies, enhancing the conditions for foreign trade [5] Group 3: Innovation and Technology - Companies are increasingly adopting automation and technological innovations, such as the establishment of a 5G unmanned factory by a robotics company to keep up with order growth [2] - The integration of technology and industry innovation is seen as a driving force for foreign trade growth, with electric vehicles, ships, and industrial robots enhancing export competitiveness [3] Group 4: Market Diversification - Companies are adopting diversified market strategies and regional economic cooperation to build a more resilient global supply chain network [7] - The introduction of platforms like "Yipay" has improved payment processes for exporters, reducing uncertainty in fund turnover [7] Group 5: Future Outlook - The Chinese government is promoting reforms and practical measures to enhance trade liberalization and facilitate foreign trade diversification [8] - The Ministry of Commerce emphasizes the strong resilience of Chinese foreign trade enterprises, which are actively adapting to changes and seeking international cooperation [8]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company is expected to achieve a net profit attributable to shareholders of 4.10 to 4.60 billion yuan for the first half of 2025, representing a year-on-year increase of 43.7% to 61.2%, with a median estimate of 4.35 billion yuan, which is a 52.5% increase [1] - The company has optimized its product structure and improved operational efficiency, leading to enhanced profitability despite external challenges such as exchange rate and tariff fluctuations [2] - The company is focusing on expanding its multi-market strategy, with a significant emphasis on the B-end market, as evidenced by the successful performance at the U.S. home furnishings exhibition [2] - The company has over 500 store-in-store locations in the U.S. and 24 in Canada as of Q1 2025, indicating a strong brand presence and growth potential [2] Financial Performance Summary - The company’s total revenue is projected to grow from 1,921 million yuan in 2023 to 4,944 million yuan in 2027, with a compound annual growth rate (CAGR) of 31.4% to 17.2% [4] - The net profit attributable to shareholders is expected to increase from 407 million yuan in 2023 to 1,313 million yuan in 2027, reflecting a CAGR of 21.8% to 17.5% [4] - The gross profit margin is forecasted to improve from 33.6% in 2023 to 40.6% in 2027, indicating better cost management and pricing power [4] - The company’s price-to-earnings (P/E) ratio is projected to decrease from 46.39 in 2023 to 14.39 in 2027, suggesting a potential increase in valuation attractiveness over time [4]

Summary of Conference Call Records Industry or Company Involved - The records primarily discuss the impact of the Middle East situation on asset prices and the current state of China's export market. Key Points and Arguments Export Market Analysis - In May, China's exports grew by 4.8%, a decrease of 3.3 percentage points from April, but still showing resilience. Adjusted for fewer working days, the growth could reach 15.8% [2][3] - The trade talks between China and the US led to a temporary reduction of tariffs on Chinese goods to 10%, resulting in the release of some backlog orders [2] - Exports to the US saw a significant decline of 34.5%, while exports to the EU and Africa increased by 14.8% and 33.3%, respectively [2] - High-tech products and equipment manufacturing, such as automobiles and general machinery, showed strong export growth, while labor-intensive products faced negative growth [2][3] - The overall export outlook remains under pressure for the year, but a diversified market strategy may mitigate the negative impacts of US tariffs [3] Impact of Middle East Turmoil - The turmoil in the Middle East has a limited direct impact on the domestic market, but it may cause short-term fluctuations and long-term structural changes [1][4] - Historical data indicates that conflicts in the Middle East have had a relatively minor effect on A-shares and Hong Kong stocks, with markets typically showing narrow fluctuations during such events [6] - In the short term, the impact on various industries is not significant, but prolonged conflicts could benefit sectors like resources and transportation [7][8] Credit and Economic Conditions - In May, new RMB loans amounted to 620 billion, an increase of 340 billion from April but a decrease of 3.3 billion from the previous year [9] - The decline in credit growth is attributed to local government debt replacement and weakened effective demand [9][10] - The current economic transformation suggests that excessively high credit growth is not desirable, as it may undermine the sustainability of bank support for the real economy [12] Market Trends and Future Outlook - The market is expected to remain in a consolidation phase, with limited upward or downward trends in the near term [8] - Small-cap stocks have shown strong performance, but there may be a shift towards large-cap stocks in the coming weeks [13] - The overall market is anticipated to maintain a volatile yet stable trajectory, with a focus on whether trading volumes can support upward movements [13] Other Important but Possibly Overlooked Content - The geopolitical situation in the Middle East, particularly the conflict between Israel and Iran, is likely to be a focal point for discussions but may not dominate market trends [8] - The potential for new policy financial tools to stimulate credit growth suggests that concerns about future credit expansion may be overstated [11]

Export Performance - In May 2025, China's exports reached $316.1 billion, a year-on-year increase of 4.8%, down 3.3 percentage points from April's 8.1% growth[2][3] - The decline in export growth is attributed to high base effects, seasonal factors, and a slowdown in global trade demand, with the global manufacturing PMI dropping to 49.6[3][4] - High-tech products contributed more significantly to export growth compared to labor-intensive products, with high-tech exports growing by 4.9%[12][14] Import Trends - Imports in May 2025 totaled $212.88 billion, a year-on-year decrease of 3.4%, falling short of the expected 0.3% growth[2][16] - The decline in imports is influenced by weak domestic demand and falling prices of bulk commodities, with significant drops in iron ore (down 12.5%) and coal (down 38.7%) imports[16][18] - High-end manufacturing imports, such as automatic data processing equipment and rubber, showed strong growth, increasing by 47.6% and 40% respectively[16][18] Trade Balance - The trade surplus for May 2025 was $103.22 billion, an increase from the previous month's surplus of $96.18 billion[2] Market Outlook - Future export growth is expected to be supported by the release of previously accumulated orders following the Geneva talks, with a focus on diversifying markets in ASEAN, Africa, and the Gulf Cooperation Council[19][20] - Despite the current resilience in exports, long-term pressures remain due to high tariffs and ongoing trade tensions, particularly with the U.S.[20][24]

Group 1 - The company has secured 8 million yuan in new orders from Turkey and Saudi Arabia in May, with a factory in Thailand expected to start production in July, marking significant breakthroughs in Southeast Asia and the Middle East markets [2] - In the first five months of the year, the company's export volume increased by 43% year-on-year, despite some U.S. clients being cautious due to tariff policies [2] - The company is located in the China Silver City, a silver deep processing industrial base in Jiyuan, which has attracted over 20 silver jewelry and craft enterprises, forming a complete industry chain from design to logistics [2] Group 2 - The company has maintained a diversified market strategy, achieving an annual sales volume of 120 million yuan, and is accelerating its global layout in response to market changes [3] - The company plans to increase the domestic market share from 30% to 50% this year, shifting from an export-dependent model to a balanced domestic and international approach [3] - The company has made breakthroughs in processing trade with the help of Jiyuan Customs, enhancing its competitiveness in the international market [3] Group 3 - The local supply chain in Jiyuan supports the company in meeting high delivery requirements, allowing for 70% of raw material procurement to be completed within the industrial park [4] - The introduction of intelligent equipment has significantly improved production efficiency, with automated embedding machines achieving five times the efficiency of manual labor [4] - The company collaborates with Italian design teams and local vocational schools to enhance product design and innovation, developing over 1,300 new products monthly [4]

Core Viewpoint - The recent reduction of tariffs between China and the United States has alleviated pressure on foreign trade enterprises, leading to a turnaround in production and operations [1] Company Strategies - The company in Luoyang, Henan, has seen a backlog of over 20,000 products due to previous order cancellations from U.S. clients, prompting a shift in focus to other overseas markets and retail consumers [1] - The company plans to deepen its diversified market strategy, targeting emerging markets in Japan, Europe, and Central Asia, while also enhancing its "semi-managed model" to reduce logistics and compliance costs [1] - The company aims to promote brand strategy and improve risk resistance through market diversification, technological independence, and supply chain optimization [1] Market Diversification Efforts - The hair products company in Henan has experienced a significant impact on orders, with a total of $4 million affected due to U.S. retailers halting orders since March [2] - The company is actively exploring new markets in Europe, Africa, Asia, and South America to reduce reliance on the U.S. market while also focusing on domestic market growth [2] - The automotive parts company in Nanyang has successfully entered the European high-end market by leveraging its offices in Germany, France, and Sweden, thus increasing revenue from regions outside the U.S. [2] Trade Data and Growth - In the first four months of 2025, Henan Province's foreign trade reached 275.77 billion yuan, a year-on-year increase of 29.5%, with exports growing by 44.1% and imports by 6.5% [3] - Trade with ASEAN and EU has seen rapid growth, with imports and exports to ASEAN increasing by 11% and to the EU by 19.2% [3] - The province is also enhancing support for foreign trade enterprises through initiatives like "Foreign Trade Quality Products China Tour" and "Double Product Online Shopping Festival," resulting in a 42% domestic sales conversion rate [3] Financial Support Initiatives - Henan Province has implemented ten financial measures to provide comprehensive services to foreign trade enterprises, ensuring each company has at least one bank for tracking services [4] - Customized financial service plans are being developed based on the operational characteristics of each foreign trade enterprise [4] - The province aims to expand the coverage of export credit insurance to over 45% and explore "cross-border e-commerce insurance" through a co-insurance model [4]

Group 1: Order and Market Strategy - The company maintains a stable production operation with current orders meeting expectations, despite some negative impact from U.S. tariffs on orders from the U.S. region [3] - To mitigate tariff-related risks, the company is accelerating capacity construction in Vietnam and implementing a diversified market strategy, focusing on emerging markets such as the EU, South America, Africa, and Australia [3] - The company aims to establish a "domestic + international" dual-driven growth model by enhancing market penetration in the domestic market [3] Group 2: Research and Development Progress - The company has made significant progress in developing ultra-high molecular weight polyethylene fiber for robotic applications, achieving expected results in key technical indicators [4] - A patented technology for enhancing the stability of ultra-high molecular weight polyethylene fiber has been authorized, further strengthening the company's competitive edge in high-end fiber technology [4] - The company is exploring various applications for ultra-high molecular weight polyethylene fiber in robotics, with positive feedback from clients and ongoing feasibility assessments for further collaboration [4] Group 3: Biodegradable Polyester Rubber Project - The company is advancing its biodegradable polyester rubber project, with a planned annual production capacity of 110,000 tons, and the first phase of 10,000 tons is set to begin production by the end of 2025 [5] - This project aligns with the company's core business and is expected to open new growth avenues, leveraging partnerships with academic institutions for technology transfer [5] Group 4: Production and Sales Distribution - The company’s subsidiary, Hengshang Materials, operates at full capacity, producing 3,000 tons of ultra-high molecular weight polyethylene fiber, with a utilization rate of 70% for internal use and 30% for external sales [6] - The external sales products are primarily used in defense, police, high-end home textiles, and safety protection sectors [6] Group 5: International Expansion and Sales Network - The company has established a nearly 30-member elite overseas sales team, all with over three years of international market experience, to enhance its global market presence [7] - A multi-layered global sales network has been constructed, with plans to expand the overseas team and strengthen market presence in the Middle East, Africa, and Australia [7]