Shenzhou International Group (2313) H2 2025 earnings summary

Executive summary

• Revenue for the year ended 31 December 2025 rose 8.1% year-over-year to RMB30,993.7 million, driven by strong demand in sportswear and casual wear, especially in the US, Europe, and Japan.

• Net profit after tax declined 6.7% to RMB5,825.3 million, mainly due to the absence of a one-off gain from a subsidiary disposal in 2024 and foreign exchange losses from RMB appreciation.

• Gross profit increased 1.4% to RMB8,165.4 million, but gross margin fell by 1.8 percentage points to 26.3% due to higher labor costs and tariff absorption.

• Final dividend proposed at HKD1.20 per share, total annual dividend up 2.0% to HKD2.58 per share, with a payout ratio of 60.9%.

Financial highlights

• Sportswear sales grew 5.9% year-over-year, accounting for 67.7% of total sales; casual wear sales surged 16.7%, making up 27.1%.

• Lingerie sales declined 2.3% due to weaker Japanese demand; other knitwear sales also decreased.

• International markets contributed 76.2% of revenue, with Europe and US sales up 20.6% and 21.0% respectively; China domestic sales fell 8.4%.

• Cost of sales rose to RMB22,828.4 million, reflecting increased labor and tariff costs.

• Finance costs decreased to RMB335.3 million, and income tax expense dropped 9.0% to RMB840.5 million.

Outlook and guidance

• The company expects continued industry challenges: weak end-user demand, rising costs, volatile raw material prices, and geopolitical risks.

• Strategic focus remains on product innovation, digital transformation, global capacity expansion, and lean cost control.

• Plans include further automation, digital upgrades, and a new garment manufacturing base in Indonesia.