Shenzhou International (02313) announced interim results. Net profit attributable to parent company owners was about 1.905 billion yuan, down about 40% year on year

According to the Zhitong Finance App, Shenzhou International (02313) announced its 2026 interim results, with sales reaching about 14.179 billion yuan, a year-on-year decrease of about 5.3%. Gross profit was approximately $3.197 billion, down about 21.2% year over year. Net profit attributable to owners of the parent company was approximately $1,905 million, a year-on-year decrease of about 40%; basic profit per share was $1.27, and an interim dividend of HK$0.88 per share.

According to the announcement, the main reasons for the large decline in profits were: 1) The Group's sales mainly came from export business, and the US dollar was used as the settlement currency for export business, while the currency for preparing financial statements was RMB. The rapid appreciation of RMB against the US dollar had a negative impact on gross margin during the period, and caused book losses due to the revaluation of US dollar net assets (mainly bank balances and accounts receivable); 2) Affected by the macroeconomic environment, terminal stocking requirements were conservative, brand customers placed orders more prudently, and some customers' order demand fluctuated more. Funding As well as the increase in the cost of retirement benefits, and with the expansion of the Group's production capacity in Vietnam and Cambodia, the overall number of employees increased, and labor expenses related to production increased by about 2 percentage points during the period; and, 3) the cost of chemical fiber raw materials rose as a result of fluctuations in international oil prices, driving up overall production costs.

The Group continues to optimize the global production capacity layout, steadily expand the production capacity scale of overseas production bases, and further promote the integration of upstream and downstream industrial chains; at the same time, it is increasing technological transformation of domestic production bases to reduce staff and increase efficiency by improving the level of production automation, so as to hedge against the pressure of the continuous rise in labor and manufacturing costs in the industry. In terms of overseas bases, the Group's second fabric factory in Vietnam's Xining Province has climbed smoothly in new production capacity. It now has an average production capacity of 100 tons of fabric per day. The flexible production line configuration can better meet the production needs of multiple categories and differentiated orders. The civil engineering for a new factory building at the domestic Anhui garment base has been fully completed. Currently, the entry and installation of supporting facilities and production equipment is being promoted to free up sufficient working space for the comprehensive technical reform of the base. The new overseas base has been expanded and implemented in an orderly manner. The land for the new Indonesian garment project was officially handed over to the Group in early August 2026. Civil construction of the project will commence immediately thereafter, and the diversified layout of overseas production capacity will be steadily promoted.