Summary of Bosideng's 2025 Half-Year Earnings Call Company Overview - **Company**: Bosideng - **Fiscal Year**: 2025 - **Industry**: Apparel, specifically down jackets Key Financial Highlights - **Revenue**: Achieved 11.9 billion CNY in the first half of FY2025, a 3% year-on-year increase, marking a historical high for the period [2][3] - **Operating Profit**: Increased by 3.1% year-on-year, reaching 11.9 billion CNY, also a historical high [3] - **Gross Margin**: Slightly improved to 50%, up by 0.1 percentage points [3] - **Inventory Turnover Days**: Decreased significantly to 178 days, down by 11 days year-on-year, indicating improved operational efficiency [3] Business Segment Performance - **Down Jacket Business**: - Revenue grew by 8.3% to 65.68 billion CNY, accounting for 74% of total revenue [2][5] - The main brand performed well, with spring/summer product sales increasing from 15% to 18% of total sales [5] - Offline direct sales channels saw a comparable store growth of 6% [5] - **OEM Segment**: - Revenue declined by 11.7% to 20.4 billion CNY, impacted by external factors such as tariffs and geopolitical issues [5] - **Women's Wear and Diversified Apparel**: - Slight decline in revenue, but minimal impact on overall group performance [5] Market Strategy and Product Development - **New Products and Designer Collaborations**: - Demand for new and designer items exceeded expectations, particularly for the "Puff" product line, which is expected to see significant growth [6][15] - Classic items like the Extreme Cold series are anticipated to remain popular during peak season [6] - **E-commerce Strategy**: - Traditional e-commerce platforms (e.g., Tmall, JD) showed steady growth, with Tmall ranking second and JD first during the Double Eleven shopping festival [7][8] - Douyin (TikTok) saw rapid growth after restructuring its official flagship store [8] Inventory and Channel Management - **Inventory Management**: - Focused on destocking in the first half of FY2025 due to excess inventory from a warm winter in 2024 [9] - Healthy inventory levels maintained, with no anticipated burdens for the second half of the fiscal year [13] - **Channel Strategy**: - Expected revenue split between self-operated and distribution channels to be approximately 70:30 [4][9] Future Outlook - **Growth Projections**: - The company aims for a double-digit growth rate of 10% for the full fiscal year, with the down jacket segment expected to exceed 10% growth in the second half [4][11] - **Pricing Strategy**: - Average selling price (ASP) expected to remain stable or slightly increase compared to the previous year [18][19] - **Store Expansion**: - Anticipated slight increase in total store count, with plans to open and close several stores [20] Brand-Specific Strategies - **Xuezhongfei and Bingjie Brands**: - Focus on online sales with minimal changes in offline store strategy; Xuezhongfei aims to solidify its position in the ice and snow sports market [21] - **Response to Seasonal Sales Pressure**: - Sales performance aligns with expectations due to significant adjustments in inventory, channels, and product innovation [22] Additional Insights - **OEM Order Visibility**: - Long-term demand from large brands is promising, but immediate growth is not expected for the current fiscal year [12] - **Women's Wear Challenges**: - Short-term revenue and profit growth not anticipated; strategies include personnel optimization and product mix adjustments [16][17]

Investment Rating - The report maintains a "Buy" rating for the company [4][9] Core Views - The company is expected to achieve steady growth in the first half of FY2026, with a notable performance in its main product line, down jackets, which showed resilience during the off-season [8] - The company’s revenue and profit are projected to accelerate in the second half of FY2026, supported by favorable inventory levels and an extended sales season due to the late Chinese New Year [8] - The company aims to maintain sustainable growth over the next three years through a dual-focus strategy on its down jacket core business and a multi-brand matrix [8] Financial Performance Summary - Revenue for FY2024A is projected at 23,214 million, with a year-on-year growth of 38.4%, and is expected to reach 34,759 million by FY2028E, with a CAGR of approximately 10.6% [3] - Operating profit is forecasted to grow from 4,398 million in FY2024A to 6,711 million in FY2028E, reflecting a steady increase in profitability [3] - Net profit attributable to the parent company is expected to rise from 3,074 million in FY2024A to 4,879 million in FY2028E, with a CAGR of 11.8% [3] - Earnings per share are projected to increase from 0.26 in FY2024A to 0.42 in FY2028E [3] Valuation Metrics - The target price is set at 6.36 HKD, based on a 17x PE ratio for FY2026 [3][9] - The company’s PE ratio is expected to decrease from 17.1 in FY2024A to 10.7 in FY2028E, indicating improving valuation attractiveness [3] - The PB ratio is projected to decline from 4.0 in FY2024A to 2.5 in FY2028E, suggesting a potential undervaluation over the forecast period [3]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [6][8]. Core Insights - The company's core brand, Bosideng, shows steady growth, with a revenue of 65.7 billion RMB in the first half of the fiscal year 2025/26, representing an 8% year-on-year increase. The main brand generated 57.2 billion RMB, also up 8% year-on-year [6][8]. - The overall revenue for the first half of the fiscal year reached 89.3 billion RMB, a 1.4% increase year-on-year, with a net profit of 11.9 billion RMB, up 5.3% year-on-year, although this was below expectations [6][8]. - The company plans to distribute a cash dividend of 0.063 HKD per share [6]. Financial Performance Summary - The company reported a gross margin of 50.03% for the first half of the fiscal year, an increase of 0.15 percentage points year-on-year, primarily due to the higher proportion of down jacket sales [8]. - The revenue breakdown shows that the down jacket business accounts for 73.6% of total revenue, while OEM management contributes 22.9%, women's wear 2.8%, and diversified clothing 0.7% [4][8]. - The company expects net profits for the fiscal years 2025/26, 2026/27, and 2027/28 to be 39.4 billion RMB, 44 billion RMB, and 48.6 billion RMB, respectively, with year-on-year growth rates of 12%, 11.7%, and 10.4% [8][10]. Stock Performance - The stock price as of November 28, 2025, was 4.96 HKD, with a 12-month high of 5.2 HKD and a low of 3.41 HKD. The market capitalization is approximately 414.99 billion RMB [2][6]. - The price-to-earnings (P/E) ratio is projected to be 13 times for the fiscal year 2025/26, decreasing to 11 times by 2027/28 [10].

Core Viewpoint - Everbright Securities maintains a "Buy" rating for Bosideng (03998), highlighting stable revenue growth and an increase in net profit margin despite a volatile external environment [1][2] Financial Performance - For the first half of the 2025/2026 fiscal year, Bosideng reported revenue of 8.93 billion RMB, a year-on-year increase of 1.4%, and a net profit of 1.19 billion RMB, up 5.3% year-on-year [2] - Earnings per share (EPS) stood at 0.1 RMB, with a proposed interim dividend of 0.063 HKD per share [2] - Gross margin improved by 0.1 percentage points to 50%, operating margin increased by 0.3 percentage points to 17%, and net profit margin rose by 0.5 percentage points to 13.3% [2] Business Segmentation - The revenue breakdown for the first half of the fiscal year shows that the brand down jacket business accounted for 73.6% of total revenue, with OEM management at 22.9%, women's wear at 2.8%, and diversified clothing at 0.7% [3] - Within the down jacket segment, the main brand Bosideng contributed 87.1% of revenue, with other brands like Xuezhongfei and Bingjie contributing 5.8% and 0.2% respectively [3] - Revenue from self-operated and wholesale channels in the down jacket business grew by 6.6% and 7.9% respectively, while online sales reached 1.43 billion RMB, a 2.2% increase year-on-year [3] Store Expansion - As of September 2025, Bosideng operated 3,558 down jacket stores, a net increase of 88 stores (+2.5%) since the beginning of the fiscal year [4] - The breakdown of stores shows 1,239 self-operated and 2,319 franchised stores, with increases of 3 and 85 stores respectively [4] Profitability and Cash Flow - The gross margin for the brand down jacket business was 59.1%, with Bosideng and Xuezhongfei at 64.8% and 47.9% respectively [5] - The overall expense ratio decreased by 1.1 percentage points to 32.4% [5] - As of September 2025, inventory was 4.74 billion RMB, a 19.9% increase from the beginning of the fiscal year but a 20.3% decrease year-on-year [5] Long-term Strategy - The company is focused on long-term development, investing in brand building and launching new products, including collaborations with top designers and flagship store renovations [6]

Core Viewpoint - Bosideng, a leading down jacket brand, reported a mid-term performance for the six months ending September 30, 2025, showing revenue growth and record net profit, despite challenges faced by its subsidiary brand Xuezhongfei [1][2] Group 1: Financial Performance - Bosideng achieved revenue of 8.928 billion yuan, a year-on-year increase of 1.4% [1] - The net profit reached 1.201 billion yuan, reflecting a 5.2% year-on-year growth, marking a historical high for the same period in recent years [1] - Revenue from the main business, "branded down jackets," increased by 8.3% to 6.568 billion yuan [1] Group 2: Revenue Breakdown - Self-operated channel revenue grew by 6.6% to 2.411 billion yuan [1] - Wholesale channel revenue rose by 7.9% to 3.701 billion yuan [1] - Revenue from the subsidiary brand Xuezhongfei declined by 3.2% to 378 million yuan [1] Group 3: Market Position and Strategy - Xuezhongfei's recent collaboration with Adidas has highlighted the manufacturing capabilities of domestic brands, indicating a shift in consumer preference towards local products [1] - Bosideng's Executive Director and CEO, Mei Dong, stated that Xuezhongfei has transitioned from negative to positive growth in sales during October and November, with a year-on-year increase of approximately 20% [1] - The company plans to continue investing resources into Xuezhongfei, focusing on brand marketing and product development [2]

此外，波司登方面表示对雪中飞品牌的投入显著高于过去几年，除了渠道资源投入外，重点倾斜于品牌 营销、产品研发等资源的投入。11月27日晚间，波司登发布了25/26财年中期业绩，实现营收约89.28亿 元，同比上涨1.4%；净利润同比增长5.2%，达约12.01亿元。其中，品牌羽绒服收入稳步提升8.3%至约 65.68亿元，其中自营渠道收入24.11亿元，同比增长6.6%；批发渠道收入达37.01亿元，同比增长7.9%。 北京商报讯（记者 张君花）11月28日，波司登集团执行董事兼执行总裁梅冬在财报交流会上向媒体表 示，"通过10月和11月销售，雪中飞已经由负增长转变成了正增长，且同比增长约二十几个点"。与此同 时，波司登方面透露，未来，雪中飞将作为公司重点发展的品牌。梅冬表示，雪中飞第一战场依然是线 上渠道，线上依然有很大的发展空间，未来将持续聚焦线上核心电商平台，深度整合品牌线上资源进一 步推动品牌的发展。同时，也将科学理性的推进线下渠道布局。如重点拓展各大购物中心及奥特莱斯等 渠道，提升消费者体验，强化品牌认知，实现上线下的互为赋能 。 ...

Core Viewpoint - The article narrates the inspiring journey of Gao Dekang, the founder of Bosideng, highlighting his entrepreneurial spirit and the brand's evolution into a global leader in down jackets, achieving annual revenues of 25.9 billion yuan and sales in 72 countries [8][37]. Group 1: Early Life and Entrepreneurial Spirit - Gao Dekang was born into a poor family in 1952 and learned tailoring from his father, quickly becoming a skilled craftsman known for his efficiency and style [15][16]. - At the age of 20, he started a sewing group with local tailors to provide work for those unable to farm, marking the beginning of his entrepreneurial journey [17]. - His exposure to the Chinese mountaineering team's achievements inspired him to create a down jacket capable of reaching the summit of Mount Everest [6][8]. Group 2: Establishment of Bosideng - In 1992, after gaining experience in the down jacket industry, Gao founded Jiangsu Kangbo Group and registered the "Bosideng" trademark, aiming for a global market presence [23][24]. - The brand faced a significant crisis in its early years due to overproduction and market misjudgment, leading to a large inventory and financial strain [25][26]. - A pivotal moment came in 1995 when Bosideng's sales strategy evolved, leading to a significant increase in sales and establishing the brand as a market leader [27][28]. Group 3: Challenges and Strategic Shifts - After going public in 2007, Bosideng expanded aggressively but faced challenges due to market saturation and the rise of e-commerce, leading to a decline in brand perception [30][32]. - The company underwent a transformation by refocusing on its core business of down jackets, eliminating non-core products, and emphasizing consumer-centric design [33][34]. - Bosideng's efforts to modernize its brand and product offerings led to a resurgence in growth, with revenues increasing from 5.787 billion yuan in 2016 to 28.068 billion yuan in 2025 [37][38]. Group 4: Current Strategy and Market Position - Bosideng aims to penetrate the high-end market while maintaining its presence in the affordable segment through its sub-brand Xuezhongfei, which targets younger consumers [44][48]. - The brand's strategy includes collaborations with renowned designers and participation in international fashion events to enhance its global image [45][46]. - As of 2024/25, Xuezhongfei is projected to generate approximately 2.206 billion yuan in revenue, reflecting its growing importance within the Bosideng ecosystem [49].

Group 1 - The recent revelation that Adidas down jackets are actually produced by the domestic company Bosideng has sparked public attention [1] - Consumers are questioning the price premium of international brands when domestic brands offer similar products at lower prices [1] - The perception of value in clothing extends beyond functionality to include emotional and aesthetic considerations, leading consumers to pay a premium for brand names [1] Group 2 - The fact that international brands are outsourced to local companies highlights the importance of Chinese enterprises in the global apparel supply chain and affirms the quality of Chinese manufacturing [2] - Bosideng has seen its stock price rise continuously, with its OEM business becoming a significant revenue source, alongside its own brand [2] - Other notable garment manufacturers in the Hong Kong market include Shenzhou International, which has a market capitalization nearing HKD 100 billion, and reached a peak of nearly HKD 300 billion in 2021 [2] Group 3 - There is a significant divergence in stock performance among Chinese apparel companies, with 361 Degrees showing a nearly 50% increase this year, while Li Ning and Anta Sports have underperformed [3] - The potential for brand value enhancement and stock market growth for Chinese apparel companies is seen as inevitable given their strong manufacturing capabilities [3]

Core Insights - Adidas is experiencing a significant recovery after reporting its first loss in 30 years in 2023, with a projected return to profitability in 2024 and double-digit sales growth across all business lines and markets in the first half of 2025 [2][4] Financial Performance - In Q3, Adidas reported a revenue increase of 12% year-on-year to €6.6 billion, achieving the highest quarterly revenue in its history [2] - The gross margin reached 51.8%, and operating profit increased by 23% to €736 million, raising the operating profit margin for the first nine months to 10.1%, exceeding the CEO's initial target [4] - Adidas has raised its full-year guidance for 2025, expecting brand revenue to grow by double digits and operating profit to reach €2 billion, up from a previous estimate of €1.7 billion to €1.8 billion [4] Product Line Performance - Revenue from footwear increased by 11% to €3.75 billion, with the ADIZERO series running shoes seeing over 30% growth [5] - Apparel revenue grew by 16% to €2.38 billion, while accessories saw a modest increase of 1% [5] Regional Performance - Sales in Europe grew by 12% to €2.33 billion, North America by 8% to €1.3 billion, and Greater China by 10% to €947 million [7] - Greater China has shown consistent quality growth for ten consecutive quarters, with Q3 revenue reaching €974 million, a 10% year-on-year increase [7] Strategic Initiatives - Adidas is focusing on sports marketing and professional endorsements to rebuild its reputation in vertical markets like running and football [5] - The company is implementing a "China for China" strategy, emphasizing local consumer engagement and innovation, with China being defined as a growth engine and innovation testing ground [7][9] Market Challenges - Adidas has faced increased costs due to higher tariffs on goods from Vietnam and Indonesia, impacting its pricing strategy in the U.S. market [7] - Recent consumer feedback highlighted concerns over the quality of Adidas products compared to local competitors, leading to discussions about pricing and product sourcing [11]

Core Insights - The controversy surrounding Adidas's down jackets being produced by the OEM Snow Flying has highlighted the brand's reliance on outsourcing production to third-party manufacturers, allowing it to focus on high-value activities like design and marketing [3][6][9] Group 1: Outsourcing and Production Strategy - Adidas has almost entirely outsourced its production, with very few products manufactured in-house, primarily high-end items produced in Germany [6][9] - The company has historically closed its own factories in China, relying on a network of OEMs concentrated in regions like Guangdong and Fujian for manufacturing [6][7] - The global production strategy includes expanding capacity in countries like Vietnam and Indonesia to optimize costs and mitigate risks [7][9] Group 2: Market Dynamics and Consumer Sentiment - The price difference between Adidas and Snow Flying products has led consumers to question the value of purchasing branded items when cheaper alternatives are available [4][9] - There is a growing consumer awareness regarding the origins of products, with many now scrutinizing manufacturing labels for transparency [19] Group 3: Financial Performance and Business Model - The outsourcing model has allowed Adidas to operate with a lighter asset base, significantly reducing fixed asset investments and risks [14] - In 2024, Adidas's revenue in Greater China grew by 10%, with a gross margin of 51.7% in Q2 2025, showcasing the financial benefits of the light asset model compared to traditional heavy asset models [14][15] Group 4: Challenges and Quality Control - The shift to outsourcing has raised concerns about quality control, with reports of product defects linked to manufacturing in regions like Vietnam and Cambodia [15][17] - The relationship between brands and OEMs is complex, balancing the need for production capacity with the risk of OEMs producing competing products [17]