Investment Rating - The report maintains a "Buy" rating for the company, anticipating a net profit growth of 44.23 billion, 50.74 billion, and 57.92 billion RMB for the years 2025 to 2027, corresponding to PE ratios of 15, 13, and 11 times respectively [5] Core Views - The company reported a revenue of 5.353 billion RMB in Q1 2025, a year-on-year increase of 12.34%, while the net profit attributable to the parent company was 762 million RMB, a decrease of 3.25% [2] - The company is experiencing stable orders with short-term profit margins affected by the ramp-up of new factories, but overall performance is in line with expectations [2] - The company is benefiting from a strong customer base, particularly with new clients like Adidas, which is expected to drive growth despite challenges in the broader market [4] Summary by Sections Performance Review - In Q1 2025, the company achieved a revenue of 5.353 billion RMB, reflecting a 12.34% year-on-year growth. The net profit attributable to the parent company was 762 million RMB, down 3.25% year-on-year, while the non-recurring net profit was 751 million RMB, also down 3.35% [2] Operational Analysis - The company sold 49 million pairs of sports shoes in Q1 2025, an increase of 8.24% year-on-year, with an increase in average selling price (ASP) contributing to order growth. New customer orders have significantly increased, particularly following the partnership with Adidas that began in Q4 2024 [3] - The gross margin for Q1 2025 was 22.90%, a decrease of 5.47 percentage points year-on-year, primarily due to the efficiency ramp-up of new factories. The company plans to enhance operational efficiency through training and the deployment of smart production equipment [3] Market and Client Dynamics - The company is minimally affected by tariffs due to its Southeast Asia factories operating under a processing model, with over 50% of raw materials sourced locally in Vietnam. The company’s production capacity is concentrated in Vietnam and Cambodia, which mitigates the impact of tariff increases announced by the U.S. [4] - The growth strategy relies heavily on new clients like Adidas and On, with strong order momentum expected to continue. The company’s customer acquisition capabilities are highlighted as a key strength, allowing it to achieve rapid growth even as major clients like Nike experience slower growth [4]

Core Insights - Adidas has launched a new Climacool shoe utilizing advanced 3D printing technology, expanding its availability from a limited release on the Confirmed platform to the global market [1] - The shoe is manufactured using additive manufacturing techniques, marking a significant innovation in the footwear industry [1] - The Climacool shoe features a unique lattice structure that provides lightweight breathability and essential performance characteristics, setting it apart in the athletic footwear market [2] Summary by Categories Product Innovation - The Climacool shoe represents a leap in manufacturing technology, moving beyond previous attempts with the Futurecraft 4D shoe, which utilized continuous liquid interface production [1] - The shoe's design can be easily modified through 3D modeling, enhancing design efficiency and flexibility, although personalized customization is not currently offered [1][2] Market Positioning - Priced at $140 (approximately 1021 RMB), the Climacool shoe is positioned as an affordable option within the high-tech footwear segment [2] - With the global release of the Climacool shoe, Adidas aims to set a new benchmark in the footwear manufacturing sector, steering the industry towards more intelligent and personalized solutions [2]