Group 1: Business Impact and Market Dynamics - The new U.S. tariff policy on Vietnam is still unclear, and historically, tariff costs are borne by brand clients, ultimately affecting consumer prices [2] - The U.S. market is estimated to account for approximately 40% of the company's sales revenue, as reported in the annual report [2] - In 2024, over 50% of raw materials for the Vietnam factory were sourced locally, while materials from mainland China accounted for about 30% [2][3] Group 2: Financial Performance and Projections - The company's short-term borrowings were 644 million RMB as of March 2025, compared to 288 million RMB at the end of 2024 [6] - Exchange rate gains were approximately 82 million RMB in 2022, 62.5 million RMB in 2023, and 28.6 million RMB in 2024, representing a small proportion of net profit [7][8] - The company has maintained a high dividend payout ratio, with cash dividends accounting for about 89% of net profit in 2021 and around 70% in 2024 [10] Group 3: Operational Efficiency and Capacity Expansion - The decline in gross margin in Q1 2025 is attributed to the ramp-up of new factories and the hiring of new employees, which affects operational efficiency [4] - New factories in Vietnam and Indonesia are expected to significantly increase production capacity, with the Indonesian facility projected to produce over 60 million pairs of shoes [5] - The company plans to optimize training and production management to enhance efficiency as new employees become more skilled [4] Group 4: Company History and Leadership - The founder, Zhang Congyuan, has been involved in the footwear industry since the 1970s, transitioning from leather shoes to sports footwear [9] - The company has evolved from its origins in the 1990s to become a major player in the athletic shoe manufacturing sector [9]