Core Viewpoint - The company, Viginie, has shown a recovery in its fiscal year 2025 performance, with an 11.7% increase in revenue to HKD 7.84 billion, despite challenges from macroeconomic fluctuations and uneven consumer recovery [1] Group 1: Business Performance - The intimate apparel segment generated revenue of HKD 4.243 billion, a modest increase of 3.0% year-on-year, accounting for 54.2% of total revenue, with a gross margin improvement of 1.0 percentage points to 24.7% [3] - The sports products segment emerged as a growth highlight, with revenue of HKD 2.934 billion, a significant increase of 26.9% year-on-year, representing 37.4% of total revenue, driven by a global sports trend and strong demand for sports bras [3] - The consumer electronics accessories segment, although smaller, saw robust growth with revenue of HKD 409 million, a substantial increase of 43.2% year-on-year, primarily driven by new product orders from core brand partners [3] Group 2: Operational Optimization - The company is advancing its smart transformation through vertical integration, intelligent management, automation, and localized supply chains to enhance production efficiency and cost control [4] - As of October 2024, the total output value from the Vietnam base accounted for 85% of total revenue, with approximately 31,900 employees in Vietnam compared to about 4,900 in mainland China [4] - The company's China operations generated revenue of HKD 1.966 billion in fiscal year 2025, a 4.4% increase year-on-year, with a net profit of HKD 85.6 million, benefiting from localized innovation and strong e-commerce performance [4] Group 3: Future Outlook - The company faces multiple challenges in fiscal year 2026 due to increased global market uncertainty from trade tariffs, leading to cautious order placements from brand partners [5] - The company is implementing cost-reduction measures across R&D, production, and operations to enhance organizational efficiency and effectiveness [5] - The company aims to leverage its leading Bonding technology to expand its successful cross-category initiatives from intimate apparel to sports and clothing segments, showcasing strong market potential [5]

Core Viewpoint - The company reported FY25 results that met expectations, with significant growth in revenue and net profit, driven by strong performance in sports products and stable demand in the intimate apparel segment [1][2]. Financial Performance - FY25 revenue increased by 11.7% to HKD 7.84 billion, while net profit rose by 28.4% to HKD 180 million [1]. - In 2HFY25, revenue grew by 11.2% to HKD 3.86 billion, and net profit surged by 219.6% to HKD 120 million [1]. - The company declared a final dividend of HKD 0.043 per share, resulting in a total payout ratio of 45.3% for FY25 [1]. Segment Performance - Revenue from intimate apparel and sports products grew by 3.0% and 26.9% to HKD 4.24 billion and HKD 2.93 billion, respectively [2]. - Sports apparel saw nearly 50% growth in functional clothing categories, with revenue exceeding HKD 1.1 billion [2]. - Revenue from consumer electronics accessories increased by 43.2% to HKD 410 million, while revenue from cups and other accessories declined by 15.0% to HKD 250 million due to the cessation of footwear operations [2]. - Victoria's Secret revenue in China rose by 4.4% to HKD 1.97 billion, with e-commerce sales growing at a double-digit rate [2]. Profitability and Cost Management - Gross margin improved by 0.8 percentage points to 23.4% due to increased capacity utilization [3]. - Operating expenses remained stable, with sales, management, and R&D expense ratios increasing slightly by 0.1 percentage points each [3]. - The company incurred HKD 220 million in additional operating expenses due to the relocation of its domestic production base [3]. - Overall, net profit margin increased by 0.3 percentage points to 2.3% [3]. Future Outlook - The company expects high order visibility for 1HFY26, but the impact of U.S. tariff policies on consumer purchasing power remains uncertain for 2HFY26 [3]. - The intimate apparel segment is expected to remain stable, while sports products are anticipated to continue growing due to Bonding apparel [3]. - The company plans to implement cost-reduction measures, including decreased capital expenditures and debt management [3]. Earnings Forecast and Valuation - FY26 earnings forecast has been revised down by 27.8% to HKD 220 million, with FY27 earnings projected at HKD 360 million [3]. - The current stock price corresponds to a P/E ratio of 12x for FY26 and 7x for FY27, maintaining an outperform rating [3]. - The target price has been reduced by 21% to HKD 2.38, indicating a potential upside of 13.3% from the current stock price [3].