Shenzhou International Group (2313) H1 2026 earnings summary

Executive summary

• Sales for the six months ended 30 June 2026 were RMB14.18 billion, down 5.3% year-over-year, mainly due to subdued end-user demand, cautious ordering by clients, and RMB appreciation against USD impacting export margins.

• Net profit attributable to owners was RMB1.90 billion, a 40.0% decrease year-over-year, with gross profit margin falling 4.5 percentage points to 22.6%.

• Sportswear sales declined 10.7%, while casual wear and lingerie sales grew 4.5% and 6.1%, respectively.

• The Board declared an interim dividend of HK$0.88 per share, down 36.2% from the prior year.

Financial highlights

• Revenue: RMB14.18 billion (down 5.3% year-over-year).

• Gross profit: RMB3.20 billion (down 21.2% year-over-year); gross margin: 22.6%.

• Net profit: RMB1.90 billion (down 40.0% year-over-year).

• Basic EPS: RMB1.27 (down 39.8% year-over-year).

• Net cash from operating activities: RMB1.92 billion (down from RMB2.69 billion in 2025).

• Cash and cash equivalents: RMB15.28 billion as of 30 June 2026.

• Gearing ratio: 39.5%, unchanged from year-end 2025.

Outlook and guidance

• The sector faces persistent operational pressures: weak demand, high costs, and volatile trade environment.

• The Group will focus on high-end development, smart transformation, and globalisation, expanding overseas capacity (notably in Indonesia) and investing in R&D and automation.

• Management expects continued cost pressures from rising wages and raw material volatility, with ongoing efforts to enhance supply chain flexibility and efficiency.