2025-08-02
The world's second-largest athletic shoe manufacturer saw its net profit attributable to shareholders increase by 67% year-on-year in the first half of the year, but will still face challenges from global supply chain tensions.
The resurgence of the COVID-19 pandemic in Vietnam has not yet had a significant impact on the performance of Huali Group.
On August 20th, Huali Group released its first-half results ending June 30th, reporting a 18.23% year-on-year increase in revenue to RMB 8.195 billion, and a 66.58% year-on-year increase in net profit attributable to shareholders of the listed company to RMB 1.291 billion.
In its announcement, Huali Group stated that the revenue growth was mainly due to the continued recovery in demand for sportswear and athletic footwear consumption after the pandemic. In the first half of 2021, Huali Group sold 10,200 pairs of athletic shoes, a year-on-year increase of 24.42%.
Huali Group's main business is the development, design, production, and sales of athletic footwear, including casual shoes, outdoor boots, and athletic sandals/slippers. Brands served by Huali Group include Nike, Converse, Vans, Puma, Under Armour, Columbia, and Deckers Brands' HOKA ONE ONE and UGG.
According to the company's calculations, Nike, Deckers Brands, VFC, Puma, and Under Armour contributed 91.16% of Huali Group's revenue. Nike is Huali Group's largest customer, contributing 2.815 billion yuan, accounting for 34.35% of Huali Group's revenue in the first half of this year.
In terms of gross profit margin and net profit margin, Huali Group has been gradually recovering since the second quarter of 2020, with its gross profit margin in the first half of this year approaching that of 2019.
Huali Group is also expanding its customer base. In the first half of this year, orders from new customers Asics and On have been shipped, and New Balance has placed an order with the company.
As of the end of 2020, Huali Group had 21 shoe factories in Vietnam, China, the Dominican Republic, and Myanmar. In 2019, Huali Group's footwear production exceeded 180 million pairs. In 2021, Huali Group will continue to increase production capacity in Vietnam and will also build new factories in Indonesia and Myanmar. This is also one of the main uses of the 3.887 billion yuan raised by Huali Group through its IPO in April this year.
According to its 2021 semi-annual report, Huali Group's overseas capacity utilization rate has increased from 85.69% in the same period of 2020 to 96.92%. In its first-quarter financial report this year, Huali Group stated that it had closed two smaller factories in Vietnam, Vietnam Fanda and Vietnam Zhengda, with Vietnam Zhengda having already completed its business deregistration procedures.
However, on August 11, Huali Group responded on its investor interaction platform regarding the COVID-19 situation in Vietnam, stating that while the epidemic is severe in some provinces of Vietnam, the epidemic is currently under control in the province where the company's factories are located, and factory production is proceeding normally.
However, Huali Group also mentioned the challenges brought about by the global supply chain shortage, stating that "rising raw material prices, shortages of shipping containers, and the development of the epidemic in Vietnam have also brought certain challenges to industry development and company operations."
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Longgang Industrial Zone, Shanxia Town, Huian County, Quanzhou City, Fujian Province, China