Investment Rating - The report maintains a strong buy rating for the company, with a target valuation not specified [3][7]. Core Views - The company's revenue and net profit for H1 2025 showed a year-on-year increase of 9% and a decrease of 17%, respectively, due to pressure from old customer orders and capacity mismatch [1][7]. - The company is expected to experience a decline in net profit for 2025, followed by growth in 2026 and 2027, with projected net profits of 3.51 billion, 4.18 billion, and 4.95 billion yuan, respectively [1][7]. - The company is expanding its production capacity in Southeast Asia, with new factories in Vietnam and Indonesia expected to come online in the second half of the year [6][7]. Financial Performance - In H1 2025, the company's revenue reached 12.66 billion yuan, a year-on-year increase of 10.4%, while net profit was 1.67 billion yuan, a decrease of 11.1% [1][7]. - The gross profit margin decreased by 6.38 percentage points to 21.85% in H1 2025, with a net profit margin of 13.2% [6][7]. - The company’s cash flow from operating activities was 1.564 billion yuan, a decrease of 9.18% year-on-year [6][7]. Business Segmentation - Revenue from the sports shoe segment increased by 10.8% to 11.34 billion yuan, while outdoor footwear revenue decreased by 57.3% to 261 million yuan [1][2]. - Revenue from North America decreased by 0.4% to 9.89 billion yuan, while European revenue increased by 88.94% to 2.397 billion yuan [2][6]. Capacity and Efficiency - The company's capacity utilization rate was 95.78% in H1 2025, with domestic utilization at 98.7% [6][7]. - New factories in Vietnam and Indonesia are expected to enhance production efficiency, although current efficiency is lower than that of older factories [6][7]. Profit Forecast and Investment Recommendations - The company is expected to achieve revenue of 26.49 billion, 30.02 billion, and 33.96 billion yuan for 2025, 2026, and 2027, respectively, with growth rates of 10%, 13%, and 13% [7]. - The current market capitalization corresponds to a PE ratio of 18x for 2025 and 15x for 2026 [1][7].

Core Viewpoint - Dongguan Jinheng Technology Trade Co., Ltd. has been established with a registered capital of 100,000 RMB, indicating a new player in the market focusing on various sectors including new materials, footwear manufacturing, and retail [1] Company Overview - The company is engaged in a wide range of activities including research and development in new materials technology, manufacturing and retail of footwear, hardware products, and various consumer goods [1] - The registered capital of the company is 100,000 RMB, which is relatively modest and may indicate a focus on niche markets or gradual growth [1] Business Scope - The operational scope includes general projects such as new materials technology research and development, shoe manufacturing, hardware product manufacturing and retail, and wholesale of clothing and accessories [1] - Additional activities encompass the sale of daily necessities, cosmetics, electronic products, furniture, leather goods, and household appliances, showcasing a diverse product offering [1] - The company also engages in import and export activities, which may provide opportunities for international trade and market expansion [1]

Core Viewpoint - Daiwa's report indicates that Jiu Xing Holdings (01836) reported a mid-term net profit of $78.6 million, exceeding market expectations of $75.8 million, but a year-on-year decline of 7% after adjusting for a one-time expense of $7 million related to increased production in Indonesia and the Philippines [1] Financial Performance - The adjusted net profit, excluding the one-time expense, would be $85.6 million, reflecting a 2% year-on-year increase when accounting for a high base effect from last year’s early shipment of 1 million pairs of shoes [1] - The company’s earnings per share forecast for the next two years has been reduced by 2% to 5% due to the impact of factory expansion events and temporary tariff support for designated customers [1] Target Price and Rating - The target price for the company has been raised from HKD 17 to HKD 20, which is based on an average of 12 times the projected earnings per share for the next two years, maintaining a "Buy" rating [1] Dividend and Profit Distribution - The company is expected to distribute an additional $60 million in profits annually, with a projected dividend yield of 10 cents unless the funds are used for share buybacks, which is considered very attractive [1] Future Growth Plans - The company is anticipated to announce a three-year net profit growth plan during the third quarter earnings release, with a target compound annual growth rate of high single digits from 2026 to 2028 [1]

Financial Performance - The group's revenue was flat for the first half of 2025, with a volume increase of 3.8% to 27.5 million pairs, primarily driven by the sports segment [4][5] - The average selling price (ASP) decreased by 3.2% due to a higher proportion of sports products with lower ASP [5] - Operating profit margin fell to 10.9%, down 30 basis points, with net profit declining by 14.6% to $78 million [5][6] - Gross profit margin decreased by 22% compared to 25.6% last year, attributed to high labor costs and temporary efficiency issues in factories [6][9] Business Line Performance - Revenue from the sports segment increased by 8.2%, accounting for 48.5% of total manufacturing revenue, driven by higher shipments to major customers [16] - The luxury category reported a net decrease of 3.5%, while the CASM category declined by 9.2%, reflecting a strategic reallocation of capacity [17] - The company commenced shipments to new customers, including Under Armour and Justin Bieber's brand, Skylar, contributing to the sports segment's growth [15][16] Market Performance - North America and Europe accounted for 48.7% and 23.4% of total revenue, respectively, with China contributing 25% of manufacturing capacity [17][18] - The company anticipates sustained growth, with plans to scale up total capacity by an additional 21 to 26 million pairs through new factories [19] Strategic Direction and Industry Competition - The company is focused on optimizing production efficiency and diversifying manufacturing capacity to align with customer needs [11][24] - A new three-year plan is being finalized, aiming for a 10% operating margin and low single-digit growth [22][24] - The company has received an MSCI ESG rating upgrade to AA, reflecting improvements in environmental performance [21] Management Commentary on Operating Environment and Future Outlook - Management expects moderate increases in shipment volumes for the full year, with continued pressure on profit margins due to efficiency improvements [22][23] - The company is addressing operational challenges in Indonesia and the Philippines, with plans for a turnaround in the second half of the year [30][31] - Tariff impacts are anticipated to affect strategic customer partnerships, with a focus on optimizing operations [23][24] Other Important Information - The company declared a $0.52 interim dividend, maintaining a payout ratio above the previous year's [5][9] - A solid net cash balance of $291 million is reported, with plans for share repurchases or special dividends in the future [8][25] Q&A Session Summary Question: Can you provide insights on the handbag business and its recovery timeline? - The company acquired a small factory specializing in handbags to expand this segment, with expectations for gradual growth [28][29] Question: Any updates on the full-year outlook? - The outlook remains consistent with previous guidance, with expectations of $6 million to $7 million in tariff impacts [30][31] Question: Will margins return to normal levels? - Management aims to restore margins to normal levels by Q4 2026, learning from past expansion challenges [32][33] Question: What are the reasons for revenue declines in China and Europe? - Revenue declines are attributed to customer allocation decisions and pre-order impacts from the previous year [36] Question: Can you quantify the inefficiencies in the first half? - Inefficiencies related to the Philippines and Indonesia resulted in approximately $7 million in profit loss [45] Question: What are the conversations like with brand customers? - Brand customers are cautious but looking to innovate and consolidate suppliers amid tariff uncertainties [47][49] Question: How is the dividend and buyback strategy affected? - There are no changes to the dividend payout policy or capital return strategy, with plans for continued shareholder returns [89]

Economic Development and Consumer Growth - Fujian province has shown strong economic vitality and quality development, with social retail sales growing at an average annual rate of 6.3% during the 14th Five-Year Plan period [2] - The province ranks sixth in online retail and third in rural online retail nationwide, indicating robust consumer engagement [2] - Key strategies to enhance consumer spending include stimulating market vitality, supporting small and medium enterprises, and improving employment opportunities for low-income groups [2] Tourism and Cultural Consumption - In 2024, Fujian is expected to receive 650 million tourists, with total tourism expenditure surpassing 835 billion yuan, reflecting year-on-year growth of 13.5% and 19.6% respectively [4] - The cultural and tourism sector has become a new growth driver for the economy, contributing 10.5% to the province's GDP [4] - Over 1,000 cultural tourism initiatives have been launched this year, with more than 6,000 events held to enhance public engagement [5] Financial Support for Economic Growth - The financial sector plays a crucial role in supporting the development of Fujian's cultural and tourism industries, with over 81.1 billion yuan in net loan growth in related fields [6] - A collaborative mechanism involving government, banks, and enterprises has been established to promote financial support for the tourism economy [6] Social Welfare and Public Services - By mid-2025, nearly 80% of Fujian's public budget will be allocated to social welfare, focusing on healthcare, elderly care, and childcare services [8] - The province has established eight national medical centers and 13 provincial medical centers to improve healthcare accessibility [8] - Fujian has developed 94,000 public childcare spaces to support working parents, enhancing the quality of early childhood education [8] Social Security Innovations - Fujian has implemented a "15-minute social security service circle" to improve accessibility and efficiency in social security services [9] - Collaborations with major banks have led to the establishment of dedicated social security service windows in 451 bank branches [9] - The province is exploring innovative service models to further enhance the convenience of social security services for the public [9]

Group 1: Local Government Concerns - Local governments face three main concerns: financial pressure, unclear responsibilities, and policy disconnection [3][4][7] - Financial constraints have led to reduced enterprise subsidies and increased risks associated with local financing platforms [4] - Unclear roles and overlapping management among various departments hinder effective investment and create inefficiencies [5][6] Group 2: Business Expectations - Businesses express three main expectations: breaking down invisible barriers, improving financing access, and ensuring stable policy environments [8][9][10] - Companies seek to eliminate discrimination and monopolistic practices that hinder fair competition [9] - There is a strong demand for more transparent and accessible policies to facilitate smoother communication with government entities [12] Group 3: Recommendations for Improvement - Experts suggest a multi-faceted approach to optimize the business environment, including tailored policies and improved governance capabilities [13][14] - Recommendations include linking local government debt resolution with clearing overdue payments to private enterprises, and implementing a negative list for approvals [13] - Enhancing standardization and efficiency in government services is crucial to reduce barriers for businesses [14]

Core Viewpoint - The 15th Xinjiang Kashgar Central Asia and South Asia Commodity Fair highlights the strong momentum of foreign trade growth in Kashgar, which serves as a frontier for China's westward opening [1][14]. Group 1: Event Overview - The fair opened on August 15 at the Kashgar International Exhibition Center, showcasing various products from Central Asia and South Asia [1]. - Exhibitors included companies from Tajikistan and Kazakhstan, featuring unique clothing, honey, and cultural products [4]. Group 2: Product Highlights - Carbon Source Material (Xinjiang) Technology Co., Ltd. showcased diamond jewelry produced using international leading MPCVD technology, with production established in Shache County, Kashgar [6]. - Xinjiang Fusha Biotechnology Co., Ltd. presented almond essential oil, with a 9,000 square meter R&D production base under construction, focusing on the deep processing of almond plant products for beauty and health industries [8]. - General Water Purification, a foreign company, aims to expand its market in Central and South Asia by showcasing water purification products at the fair, with plans to establish a production line in Shache County [10]. Group 3: Economic Impact and Collaboration - The Shanghai industry aid to Xinjiang and consumption assistance model combines Kashgar's products with Shanghai's market and R&D capabilities, enhancing local industries [12]. - The fair featured a diverse range of exhibitors, including state-owned enterprises and foreign companies, reflecting a collaborative effort in industrial aid to Xinjiang [13]. - The total import and export value of Kashgar reached 99.44 billion yuan in 2024, marking an 18.8% year-on-year increase, accounting for 22.9% of Xinjiang's total foreign trade [14].

Group 1 - As of August 15, 2025, the stock price of Huali Group is 51.36 yuan, reflecting a 0.16% increase from the previous trading day [1] - The trading volume on that day was 27,184 hands, with a total transaction amount of 1.39 billion yuan, leading to a total market capitalization of 59.937 billion yuan [1] - Huali Group primarily engages in the research, design, production, and sales of athletic footwear, with products mainly exported to overseas markets [1] Group 2 - The company's mass production factories are mainly located in Vietnam and Indonesia, exporting products to global markets including the United States [1] - Huali Group stated on its investor interaction platform that its sales quotes do not include import tariffs, which are borne by the importing enterprises [1] - The company is closely monitoring changes in U.S. tariff policies and their impact on the global athletic footwear consumption market [1] Group 3 - Regarding share repurchase or increase plans, the company has committed to timely disclose relevant information as per regulations [1] - On August 15, the net outflow of main funds was 12.3931 million yuan, with a cumulative net outflow of 14.8387 million yuan over the past five trading days [1]

Group 1 - The recent US-China Geneva trade talks have resulted in a joint agreement that exempts tariffs on industries such as clothing, footwear, white goods, food, and packaging, placing them on a tariff whitelist [2] - Huayi Group (300979.SZ) stated that its mass production factories are primarily located in Vietnam and Indonesia, and that the company exports products from these countries to the US and other global markets, with tariffs borne by the importing enterprises [2] - The company is closely monitoring the impact of US tariff policies on the global sports shoe consumption market [2] Group 2 - The company indicated that any decisions regarding share buybacks or increases will be disclosed in accordance with regulations on designated information disclosure platforms [2]

机构：国泰海通证券 研究员：盛开/曹冬青 本报告导读： Q2 制造业务收入稳健增长，毛利率环比Q1 改善，H2 订单能见度有限，但毛利率预计好于 H1；零售业 务 Q2承压，国内促销环境浓，预计 H2仍面临压力。 风险提示：宏观经济不及预期，关税影响超预期 量价拆分来看，出货量1.27 亿双，同比增长5.0%（Q1/Q2 产能利用率分别为91%/95%），ASP 20.61 美 元，同比增长3.2%。H1 毛利率为17.7%，同比下降1.4pct（Q1/Q2 分别为17.67%/17.75%，分别同 比-2.6/+1.9pct），主要由于各厂区的产能负载不均，部分产线生产效率未达设定标准，叠加各地新增人 力及薪资上涨推高成本。 投资要点： 零售业务：Q2 收入、毛利率承压。2025H1 零售业务收入为12.6 亿美元，同比下降8.6%（Q1/Q2 分 别-6.5%/-11.1%），其中：实体店方面各地客流波动，线下直营及加盟渠道收入较2024 年同期显著下 滑；全渠道同比增长16%，直播销售翻倍增长。H1 毛利率为33.5%，同比下降0.7pct（Q1/Q2 分 别-0.5/-0.9pct），主因行业促销氛围 ...