Investment Rating - The report maintains a "Buy" rating for the company [2][6]. Core Insights - The company achieved a revenue of $1.23 billion in H1 2025, representing a year-on-year growth of 12.4%, and a net profit of $100 million, up 17.0% year-on-year. The interim dividend was set at 16.3 HK cents per share, totaling $60 million, with a payout ratio of 60% [4][6]. - The company is expected to maintain strong order growth in the short to medium term due to its diversified product categories and supply chain advantages, which enhance core customer penetration and increase market share among new sports clients. Profitability is anticipated to improve through order structure optimization, integration, and automation, leading to a potential increase in valuation as growth materializes [2][4]. Summary by Sections Revenue Performance - The company reported a revenue of $1.23 billion in H1 2025, with significant growth across various product categories: leisure (+11%), outdoor sports (+12%), denim (+10%), underwear (+10%), and sweaters (+29%). The revenue growth was driven by the company's ability to meet diverse downstream demands and enhance core customer penetration [7][4]. Profitability - The gross margin improved by 0.2 percentage points to 19.7% in H1 2025, with notable increases in leisure and underwear segments. The net profit margin also saw a slight increase of 0.3 percentage points to 8%, supported by effective cost management and a reduction in the effective tax rate [7][4]. Future Outlook - The company is projected to achieve net profits of $230 million, $260 million, and $300 million for the years 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 16%, 14%, and 13%. The expected price-to-earnings ratios for these years are 11, 9, and 8 times, with a projected dividend yield of 5.5% in 2025 under a 60% payout assumption [2][9].

Core Viewpoint - The company demonstrated resilience in growth amidst a volatile environment, with a 12.4% year-on-year increase in revenue to $1.23 billion and a 16.8% increase in net profit to $100 million in H1 2025 [1][2]. Revenue Growth - Revenue by product categories showed growth: leisure (11.4%), outdoor (12.4%), denim (10.3%), underwear (9.5%), and sweaters (29.2%), totaling $3.4 billion, $3.1 billion, $2.6 billion, $2.1 billion, and $1 billion respectively [1]. - Revenue by region also increased: Asia-Pacific (14.5% to $480 million), North America (11.7% to $460 million), Europe (9.7% to $250 million), and other regions (14.9% to $40 million) [1]. Capacity Expansion - The company increased its workforce by 10,000 employees in 2024, with 4,000 new hires in H1 2025 to enhance production capacity [1]. - Plans for capacity expansion in Europe are underway to strengthen diversified production capabilities [1]. Profitability Improvement - Gross margin improved by 0.2 percentage points to 19.7%, with specific category margins showing varied changes [2]. - The net profit margin increased by 0.3 percentage points to 8% due to improved production efficiency and stable expense ratios [2]. Inventory and Operational Stability - Inventory rose by 18.5% to $350 million, reflecting increased stock to meet order growth, with inventory turnover days increasing by 4 days to 59 days [2]. - Accounts receivable and payable turnover days increased by 15 and 3 days respectively, indicating stable operational conditions [2]. Investment Outlook - The company is positioned as a leading global apparel manufacturer with diverse product offerings and rapid growth in sports orders, with projected net profit growth of 13.5%, 18.8%, and 17.4% for 2025-2027 [3].