XINGYE TECH.(SZ:002674)2025-04-30 10:24Group 1: Market Trends and Consumer Preferences - Recent changes in consumer preferences emphasize comfort, functionality, and fashion, leading to a decline in traditional business shoe demand and a decrease in the demand for natural leather products in China [2] - The overseas market, particularly in Europe and the U.S., shows stable demand, with a recovery in orders from foreign brands boosting export market demand [2] Group 2: Financial Performance - In 2024, the company achieved a revenue of CNY 2.95 billion, a year-on-year increase of 9.32%, while net profit attributable to shareholders was CNY 142 million, a decrease of 23.97% compared to the previous year [3] - In Q1 2025, the company reported a revenue of CNY 627 million, a year-on-year increase of 5.04%, with net profit of CNY 18.94 million, down 45.31% from the same period last year [3] Group 3: Automotive Leather Demand - The demand for automotive interior leather is growing due to the increasing use of natural leather in mid-to-high-end domestic electric vehicles, with the company’s subsidiary, Hongxing Automotive Leather, supplying major brands like Li Auto and NIO [2][4] - Despite being in the off-season for automotive consumption, Hongxing Automotive Leather's sales are expected to maintain stable growth due to new model deliveries in the second half of 2025 [3] Group 4: Competitive Advantages - Hongxing Automotive Leather holds a leading position among domestic automotive interior leather suppliers, benefiting from stable supply, production flexibility, and responsive service [4] - The company has established partnerships with several well-known automotive brands, focusing on high-end models that demand superior leather quality [4] Group 5: Capacity and Procurement Strategy - Hongxing Automotive Leather has significant room for capacity expansion to meet increasing sales, with plans for gradual production increases based on customer sales forecasts [5] - The company is managing the impact of increased import tariffs on U.S. raw hides by diversifying procurement channels from South America, Europe, Australia, and domestic markets [5] Group 6: Brand Collaborations - The company successfully entered the international supply chain of Adidas, indicating its capability to meet international standards in product development, quality, and customer service [6] - The contribution from overseas brands, particularly Adidas, is expected to significantly boost overall revenue in 2025 [5] Group 7: Other Business Performance - Baotai Leather reported a revenue increase of 1.31% in Q1 2025, with notable profit growth driven by the rising demand and prices for second-layer leather due to market trends [7]