Group 1: Investor Relations Activities - The investor relations activity included a specific research meeting with representatives from various investment firms on May 20-21, 2025, both offline in Shenzhen and online via Zoom [2] - The company’s board secretary, Fang Lingling, was present to address investor inquiries [2] Group 2: Impact of Tariff Policies - The company is monitoring the developments of the U.S. tariff policies on Southeast Asian countries, particularly Vietnam and Indonesia, but has not seen significant order cancellations due to tariffs [2] - The company has prepared different response plans based on potential tariff increases and maintains close communication with clients [2] Group 3: Order Outlook for 2025 - The company has a diverse client base, with most clients being publicly listed companies, and expects stable order growth in 2025 based on clients' performance guidance [2] - The company is confident about its 2025 performance, although it acknowledges increased uncertainty in the international economic environment due to recent tariff policies [2] Group 4: Average Selling Price and Gross Margin - Changes in average selling price are influenced by customer and product mix, with fluctuations in brand order volumes affecting overall pricing [3] - The gross margin is currently impacted by the ramp-up phase of new factories and the training of new employees, but efficiency is expected to improve as operations stabilize [4] Group 5: Production Capacity and Utilization - The company’s production capacity is primarily located in Vietnam, with new factories in Indonesia and Sichuan still in the early stages of production [6] - The company is actively investing in new capacity to meet order demands, with a flexible capacity allocation based on annual order volumes [6] Group 6: Automation and Efficiency - Full automation in sneaker production is challenging due to the variety of styles and materials, but the company is continuously improving automation levels [7] - In 2024, the company introduced over 500 intelligent cutting machines and 4 automated molding lines to enhance production efficiency [7] Group 7: Dividend Policy - The company has a strong commitment to shareholder returns, with cash dividends in 2021 accounting for approximately 89% of net profit, and 2022 and 2023 dividends at 43% and 44% of net profit, respectively [8] - The company plans to maintain a reasonable dividend policy while balancing capital expenditures and operational needs, with a significant retained earnings balance of approximately 10.4 billion RMB by the end of 2024 [8]

Core Insights - The article highlights the collaboration between JD.com and Desai Group, showcasing the integration of domestic and foreign trade in China's manufacturing sector [1][3]. Group 1: JD.com's Support for Foreign Trade Enterprises - JD.com has launched a 200 billion yuan support plan specifically for foreign trade enterprises to help them penetrate the domestic market, providing significant opportunities for companies like Desai [3]. - The company offers systematic support to foreign trade enterprises by optimizing product structures and providing dedicated traffic channels on its platform, resulting in a threefold increase in traffic and sales for Desai's products after going live on JD.com [3][5]. Group 2: Desai Group's Strategic Shift - Desai Group, a traditional foreign trade enterprise with over 30 years in the footwear industry, produces 8 million pairs of shoes annually and anticipates a production value of 1.098 billion yuan in 2024 [3]. - The company is actively adjusting its strategic direction in response to changes in international market demand, leveraging JD.com's resources to explore new pathways for integrated domestic and foreign trade [3]. Group 3: JD.com's New Merchant Incentives - In May 2023, JD.com upgraded its new merchant incentive policy, offering unprecedented support such as zero commission and up to 100% rebates for new merchants in various fashion categories [5]. - This initiative aims to reduce operational costs for merchants and foster high-quality growth, with a tiered rebate mechanism designed to encourage sales and enhance profitability for new entrants [5].

Summary of Key Points Core Viewpoint - The Fujian Provincial Market Supervision Administration announced the results of the second batch of quality supervision inspections for daily consumer goods in 2024, revealing that out of 50 batches of children's shoes from 48 manufacturers, 2 batches were found to be non-compliant, resulting in a non-compliance rate of 4% [1]. Group 1: Inspection Results - A total of 50 batches of children's shoes were inspected, with 2 batches failing the quality standards [1]. - The non-compliance rate for the inspected children's shoes was reported at 4% [1]. Group 2: Actions Taken - The Fujian Provincial Market Supervision Administration has instructed local market supervision authorities to take legal action against the non-compliant products and their manufacturers [1]. Group 3: Compliance Details - The inspection results included a list of compliant and non-compliant products, detailing the manufacturers, product names, specifications, and inspection outcomes [1]. - Notable compliant manufacturers included Xiamen Tebu Children's Products Co., Ltd. and Jinjiang Superba Footwear Co., Ltd., among others [1]. - Non-compliant products were identified from Quanzhou Baitong Sports Goods Co., Ltd. and Fujian Laiku Sports Goods Co., Ltd. [1].

事件评论 展望：2025 年基本面筑底，期待2026 年起的基本面弹性回升+估值改善。短期，新客高增、老客相对 稳定下预计2025 年仍可维持较优增速。中期，老客调整企稳叠加（次)新客户持续放量有望驱动新一轮 成长，积极产能扩张保障顺势时业绩弹性向上，行业格局优化叠加利润率恢复下，估值有望提升。预计 2025-2027 年归母净利润为40.3、46.7、54.8亿元，同比+5%、+16%、+17%，现价对应PE 为16、14、 12X，按70%分红比例下，2025 年对应股息率为4.3%，维持"买入"评级。 风险提示 1、海外宏观经济波动； 2、品牌库存去化不及预期； 3、产能投放进度不及预期。 收入：销量延续增长，产品结构调整下单价提升。2025Q1 人民币口径，公司营收为53.5亿元（人民币 同比+12.3%/美元同比+11.2%），次新&新客归母净利润7.6 亿元（人民币同比-3.2%/美元同比-4.2%）， 归母净利率同比-2.3pct/环比-1.1pct 至14.2%。量价拆分来看，Q1 销量0.49 亿双（同比+8.2%），新（次 新）客户放量下销量延续增长，部分老客户预计承压；单价约108.4 ...

Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Views - The company's fundamentals are expected to stabilize in 2025, with a rebound in performance and valuation anticipated starting in 2026. Short-term growth is supported by a significant increase in new customers, while existing customers remain stable, allowing for a favorable growth rate in 2025. In the medium term, the stabilization of existing customers combined with the continued growth of new customers is expected to drive a new growth cycle. Active capacity expansion is anticipated to enhance performance elasticity, and improvements in industry dynamics and profit margins are likely to lead to valuation uplift. The projected net profits for 2025-2027 are 40.3 billion, 46.7 billion, and 54.8 billion yuan, representing year-on-year growth of 5%, 16%, and 17%, respectively. The current price corresponds to a PE ratio of 16, 14, and 12 times for the respective years, with a projected dividend yield of 4.3% for 2025 based on a 70% payout ratio [2][4][6]. Financial Performance - In Q1 2025, the company achieved revenue of 5.35 billion yuan, a year-on-year increase of 12%, while net profit attributable to the parent company was 760 million yuan, reflecting a decrease of 3% year-on-year. The gross profit margin for Q1 2025 was 22.9%, down 5.5 percentage points year-on-year, primarily due to the ramp-up of a new factory. The company maintained strong cost control, with a decrease in expense ratios despite the pressure on profit margins [4][9].

Group 1: Investor Relations Activities - The investor relations activities included specific object research and broker strategy meetings held on May 12-13, 2025, in Zhongshan and Shenzhen [2] - The company engaged with investors regarding the impact of U.S. tariff policies on Southeast Asian countries, indicating no significant changes in order volumes due to tariffs [2][3] - The company maintains a stable production pace with full orders and normal operations across factories [2] Group 2: Order and Revenue Outlook - The company is optimistic about 2025 orders, with most clients showing growth, although some face slower terminal sales [3] - The average selling price is influenced by customer and product mix, with fluctuations based on brand order volumes [4] Group 3: Production Capacity and Expansion - The main production base is in Vietnam, with a new finished shoe factory expected to start production in 2025; the Indonesian base is projected to have a capacity of over 60 million pairs, starting in mid-2024 [5] - New factories typically require 1.5 to 2 years to reach full production capacity [11] - The company plans to maintain active capital expenditure between 1.1 to 1.7 billion RMB annually from 2022 to 2024 for capacity expansion and automation upgrades [13] Group 4: Profitability and Cost Management - The gross margin is expected to be affected by the initial inefficiencies of new factories and the training of new employees [6] - The pricing model for products is based on a cost-plus approach, leading to similar gross and net margins across different price points [7][8] - Labor costs in Indonesia and Vietnam are expected to be comparable, with no significant differences in profit margins anticipated once the Indonesian factory is fully operational [9] Group 5: Industry Trends and Strategic Adjustments - The company is monitoring changes in the international economic environment due to tariff policies and is prepared to adjust its operational strategies accordingly [3] - The footwear industry lacks integrated manufacturers due to the complexity of raw material supply chains, but the company is open to investing in raw material development if industry trends shift [12]

Core Insights - STARAY, a new national trend brand, opened its second store in Japan, highlighting its rapid expansion in the market within six months [1] - The brand was founded in 2020 in Hangzhou and is recognized as the world's first 3D-printed consumer goods leader, focusing on "technology empowerment + humanistic care" [1][2] - STARAY's innovative approach includes a unique lattice design and AI algorithms for optimizing shoe comfort and support based on ergonomic calculations [1][2] Product Innovation - The "Cells" series of shoes represents a significant advancement in 3D printing technology, utilizing a new generation of ultra-fast light-curing 3D printing techniques and proprietary flexible materials [2] - The production process eliminates traditional manufacturing steps, aligning with green development principles by removing the need for glue [2] - Despite the high cost of 3D-printed shoes, with prices typically above 1,000 yuan, STARAY has achieved a remarkable 400% repurchase rate, indicating strong customer loyalty [2] Market Strategy - The Japanese market serves as both a testing ground and a strategic foothold for STARAY's global expansion [2] - STARAY's participation in the 78th Cannes Film Festival as a partner for "China Night" signifies a shift from "manufacturing overseas" to "cultural exploration" for Chinese brands [3]

Core Insights - The footwear industry in Sichuan, particularly in Chengdu, faces significant challenges due to international trade friction and competition from Southeast Asia, which has lower labor costs and advanced technology barriers [1][3] - Chengdu's footwear sector, while historically significant and a major production hub for women's shoes, is currently struggling with a lack of self-owned brands and high-value segments, primarily focusing on OEM and low-end products [2][3] - The industry is undergoing a transformation, with a shift from traditional manufacturing to a focus on innovation, branding, and digitalization, which is essential for maintaining competitiveness [4][5] Current Industry Status - Chengdu has over 2,400 footwear enterprises, with around 2,000 located in the city, accounting for 83.3% of the province's total [1] - The footwear industry is heavily reliant on OEM production, with less than 5% of companies having their own brands, and about 70% focusing on mid to low-end women's shoes [2] - The industry is experiencing a decline in scale due to urbanization and environmental regulations, leading many companies to shift towards trade rather than manufacturing [2] External Challenges - The Chinese footwear export market is facing a downturn, with decreases in quantity, export value, and average price due to reduced overseas consumption and increased competition [3] - Trade tensions and currency issues are causing a noticeable reduction in foreign trade orders for footwear companies [3] - The majority of Chengdu's footwear enterprises are small to medium-sized, making it difficult for them to invest in necessary digital transformations, which can cost 150%-200% of their annual profits [3] Recommendations for Growth - The industry should focus on innovation to enhance brand value and promote intelligent upgrades, targeting the mid to high-end female consumer market [4][5] - Establishing collaborative platforms with local universities for research and development can help in creating new materials and processes, thus transitioning towards luxury and personalized products [4] - Implementing smart manufacturing and green transformation initiatives is crucial, with recommendations for government support in technology innovation and equipment upgrades [5][6] Strategic Initiatives - Developing a "footwear+" ecosystem that integrates various lifestyle elements can enhance consumer engagement and brand loyalty [7] - Establishing a digital collaborative platform to streamline the supply chain and reduce costs for small and medium enterprises can strengthen Chengdu's position in the industry [7] - Promoting Chengdu as a hub for fashion trends through high-profile events and collaborations with design institutions can elevate the city's status in the global footwear market [7]

Core Viewpoint - The recent controversy surrounding the leadership of Qindao Double Star, particularly the alleged power struggle involving Wang Hai and his family, has brought the company back into the public eye, raising questions about its governance and future direction [2][3][4]. Group 1: Leadership and Governance Issues - Wang Hai, the 84-year-old president of Qindao Double Star, claims he has been threatened and physically restrained by his son and daughter-in-law in an attempt to seize control of the company [4][6]. - The authenticity of Wang Hai's public letter, which details these allegations, is disputed, with company representatives stating it may be fake [3][4]. - Wang Hai remains a significant figure in the company, despite his family members holding a majority of shares, with his daughter-in-law Xu Ying owning approximately 45.569% [7][15]. Group 2: Company History and Market Position - Qindao Double Star, originally established in 1921, has a rich history in the footwear industry, once dominating the market with thousands of retail outlets [13][14]. - The company has faced challenges in recent years, including a decline in brand relevance and market share, particularly as it caters primarily to older demographics [18]. - The brand's value is reported at 49.2 billion, but specific financial data has not been disclosed, raising concerns about transparency [18]. Group 3: Financial Performance and Challenges - Qingdao Double Star has been struggling financially, with reported losses of approximately 1.76 billion over the past six years, and a cumulative loss exceeding 3 billion in net profit [19]. - The company attributes its financial difficulties to external market competition and ongoing construction of its factory in Cambodia, while competitors have managed to remain profitable [19]. - The company is attempting to alleviate its financial strain through acquisitions, such as the proposed purchase of South Korea's Kumho Tire, which may increase its debt burden [19][20].

Core Viewpoint - The article discusses the recent turmoil within Qindao Double Star's management, particularly focusing on the public letter from Wang Hai, the company's president, alleging attempts by his family members to seize control of the company [2][4][8]. Group 1: Power Struggle - Wang Hai, aged 84, claims he was physically threatened and restricted by his son and daughter-in-law in an attempt to force him to relinquish control of the company [2][4][7]. - The authenticity of Wang Hai's letter is disputed, with company representatives stating it may be fake, while his daughter-in-law, Xu Ying, claims they cannot locate him [2][8][9]. - Xu Ying and Wang Jun, Wang Hai's son, have gained significant control over the company, with Xu holding approximately 45.569% of shares, making her the largest shareholder [8][9]. Group 2: Wang Hai's Legacy - Wang Hai is credited with transforming Double Star into a leading brand in the Chinese sports shoe industry, earning the title "Shoe King" [2][15]. - The company has a rich history dating back to 1921, with significant milestones achieved under Wang Hai's leadership, including innovative marketing strategies that propelled the brand to national prominence [15][18]. - Despite his advanced age, Wang Hai remains a central figure in the company, actively participating in its operations and public image [9][19]. Group 3: Challenges Facing Double Star - Double Star's brand value is reported at 49.2 billion, but the company has struggled to maintain its market presence, facing competition from younger brands and a decline in store numbers [22][24]. - The company has also faced operational challenges, including a lack of transparency regarding its financial data and the performance of its real estate ventures [24]. - Qingdao Double Star, the tire business, has reported continuous losses since 2019, with a cumulative loss of approximately 1.76 billion, raising concerns about its future viability [24][25].