Yue Yuen Industrial (551) H2 2025 earnings summary

Executive summary

• FY25 revenue reached US$8,031.4mn, down 1.8% year-over-year, with profit attributable to owners at US$381.1mn, down 2.9% year-over-year.

• Manufacturing revenue grew 0.5% to US$5,648.3mn, while retail (Pou Sheng) revenue declined 7.2% in RMB terms due to weak consumer confidence and aggressive promotions.

• Group maintained a strong net cash position and declared a final dividend of HK$0.90 per share, with a total annual dividend of HK$1.30 per share and a payout ratio of 70%.

• Digital transformation and sustainability initiatives advanced, with new capacity in Central Java, Indonesia, and India.

• Non-recurring profit included a one-off gain from disposal of associates; recurring profit attributable to owners decreased by 3.1%.

Financial highlights

• Gross profit margin decreased to 22.8% from 24.4% year-over-year; operating profit margin fell to 5.4% from 6.7%.

• Free cash flow was US$265.3mn; operating cash flow (excluding tax dispute provision) was US$611.5mn.

• EBITDA declined 13.4% to US$779.1mn; capital expenditure increased 54.2% to US$325.9mn, mainly for manufacturing expansion.

• Volume of shoes shipped was 252.2 million pairs (-1.2%), with average selling price up 3.7% to US$21.00 per pair.

• Bank balances and cash at year-end were US$851.2mn; gearing ratio stable at 15.4%.

Outlook and guidance

• Ongoing focus on premium product mix, digitalization, and operational agility to offset demand volatility and cost pressures.

• Near-term order demand expected to fluctuate due to tariffs, inflation, and macroeconomic uncertainties.

• Seasonal production challenges anticipated in Q1 2026 due to Lunar New Year and Ramadan overlap.

• Continued investment in new manufacturing capacity and smart automation to support long-term growth.