# Annual Report Disclosure Followed by Daily Limit Up! The Textile Industry Leader Behind Uniqlo and Adidas Plays the Cost-Cutting Card Amid Industry Headwinds

On March 13, Jiansheng Group (603558.SH) hit the daily limit-up on its first trading day after the annual report disclosure, closing at 12.99 yuan per share. The company delivered an annual report with slight revenue growth and significant profit improvement, and plans to distribute a cash dividend of 0.35 yuan per share (tax included) to all shareholders. After considering mid-year cash dividends already paid, Jiansheng Group’s planned cash dividend for 2025 will account for nearly half of the net profit attributable to shareholders during the same period. However, financial news notes that Jiansheng Group’s main business profit growth was limited, and the controlling shareholder holds a large stake.

Industry overall under pressure, one-time asset disposal boosts profits

As a leading textile company, Jiansheng Group mainly produces cotton socks and seamless apparel. Its current business model primarily involves ODM and OEM services for well-known global brands and retailers’ private labels. Major clients and brands include Uniqlo, Puma, Decathlon, Adidas, and others, with key markets in Europe, the US, Japan, Australia, and China.

Over the past year, textile companies have faced tough times. A research report from Chuangxin Securities pointed out that in 2025, tariffs disruptions and weak external demand will pressure textile companies’ performance. Everbright Securities also mentioned that since the second quarter of 2025, the industry has been impacted by US tariffs increases, leading to weakened demand and affecting revenue and profitability.

Jiansheng Group mentioned in its annual report that it was affected by inventory reduction pressures from European and American clients, and openly stated: “2025 is a critical year for the restructuring of the global textile supply chain. Against the backdrop of demand fluctuations and ongoing tariff pressures in Europe and America, industry competition has shifted from simple ‘price wars’ to a comprehensive competition based on ‘quality, efficiency, green practices, and delivery’ across multiple dimensions.”

This is also reflected in Jiansheng Group’s own performance. The company’s first and half-year reports in 2025 showed a year-on-year decline in net profit attributable to shareholders, with only the third quarter showing sequential and year-on-year increases, and the fourth quarter maintaining net profit growth.

For the full year 2025, Jiansheng Group achieved revenue of 2.589 billion yuan, up 0.59% year-on-year; net profit attributable to shareholders was 405 million yuan, up 24.62%; gross profit margin and net profit margin were approximately 30.20% and 15.64%, respectively, with increases of 1.41 and 3.01 percentage points year-on-year.

However, it is important to note that the above net profit growth was influenced by a one-time asset disposal gain. According to disclosures, the subsidiary Jiangshan Knitting’s land and property were expropriated, with a compensation agreement amounting to 259 million yuan. By the end of 2025, related assets had been transferred and property rights registered. The asset disposal realized a gain of 72.64 million yuan, and the after-tax impact on the company’s net profit was 62.20 million yuan.

Excluding non-recurring gains and losses, the profit increase in the company’s main business was modest. In 2025, the net profit after deducting non-recurring items attributable to shareholders was 335 million yuan, only a 4.27% increase year-on-year.

Large buyback and dividend payout, stock price hits recent high

Looking at the stock performance, this performance still received market recognition, and the high dividend payout ratio may also have contributed to the stock price rise.

According to the company’s annual profit distribution plan, it intends to pay a cash dividend of 0.35 yuan per share (tax included) to all shareholders, totaling 115 million yuan (tax included). After deducting the mid-year cash dividend of 86.69 million yuan, the total planned cash dividend for 2025 is 202 million yuan, accounting for 49.94% of the net profit attributable to shareholders in 2025, nearly half.

Behind this substantial dividend, the controlling shareholders also benefited significantly. Data from Tonghuashun iFinD shows that the actual controller Zhang Maoyi and the concerted action partner Hangzhou Yideng Trading Co., Ltd. together hold 44.11% of Jiansheng Group’s shares, far exceeding the single-digit holdings of the second-largest shareholder.

Additionally, the company repurchased shares in 2025, with a total buyback and cancellation amount of about 260 million yuan. According to iFinD data, the company’s cumulative dividend payout ratio (including share repurchases) over the past three years reached 300.76%. Over the past year, Jiansheng Group disclosed more than 30 buyback-related announcements, far more frequently than in previous years. The stock price once reached a recent high of 13.5 yuan per share in November last year. From the low point in April 2025, the stock price increased by nearly 50% by November.

Steady revenue, improving profitability through cost reduction and efficiency

Although the growth in net profit after non-recurring items was modest, it was still significantly higher than revenue growth. From financial data, gross margin had a large impact, while major expenses did not decrease noticeably. The company attributes this achievement to its “cost reduction and efficiency improvement” strategy, including measures such as increasing automation, vertical integration, and overseas expansion.

For example, the annual report mentions that in 2025, the company further promoted the construction of intelligent factories at Jiangshan Industrial Park. This project, as a pilot for the company’s new generation of production facilities, will significantly enhance the company’s automation level and greatly reduce labor requirements, alleviating recruitment and personnel cost pressures.

In terms of vertical integration, Jiansheng Group stated that it has built a complete upstream and downstream industrial chain, forming strong cost control and quality assurance capabilities. Additionally, through full-chain vertical integration, the company reduces production and management costs by establishing in-house factories for dyeing, elastic yarn, spandex coating, and other raw materials, as well as auxiliary processes like embroidery, plastic molding, and accessories.

Amid tariff policy disruptions, overseas manufacturing is also an important cost-control measure. In 2025, 88% of the company’s revenue came from overseas markets: Americas, Europe, and Japan, with respective shares of 31.01%, 23.17%, and 19.12%.

Leading companies deepen their global expansion

The annual report shows that, based on the four major production bases in Haiphong, Xing’an, Quang Hóa, and Nanding in Vietnam, the company invested in a new production base in Egypt in 2025, stating that it is “gradually evolving towards a ‘domestic + Vietnam + Egypt’ multi-polar layout to maximize trade barrier avoidance.”

Jiansheng Group said that in its global operations, it leverages tax advantages in Vietnam and Egypt to improve cross-border supply chain efficiency and reduce overall import costs for customers.

During the previous “tariff parity” controversy, the company explained the policy impact: “Most of our products supplied to the US market are from Vietnam overseas bases, so the impact is relatively limited. Our current strategy is to shift some orders directly exported from China to the US to Vietnam for manufacturing, and transfer non-US orders back to domestic production.”

Currently, such global expansion is common among leading textile companies. Recent statistics from Guolian Minsheng Securities on the capacity distribution of listed textile manufacturing companies since 2015 show that most Chinese textile capacity has declined, with a continued shift towards Vietnam, Cambodia, Indonesia, India, and other countries. Many companies are expanding overseas capacity.

Jiansheng Group’s annual report also mentions similar trends. Regarding industry prospects in 2026, the company states that leading enterprises will accelerate establishing more complete supply chain bases in Mexico (nearshore outsourcing), Eastern Europe, or Africa, achieving a “raw materials in China, manufacturing globally, and sales locally” closed-loop to avoid tariffs.

Furthermore, dependence on traditional European and American markets continues to decline. The RCEP region, “Belt and Road” countries, Middle East, and Latin America are expected to become new growth engines. As companies adapt to tariff policies and adjust supply chains, the direct impact of tariffs in 2026 may ease compared to 2025, but non-tariff barriers such as carbon tariffs (CBAM) and labor standards will become new entry thresholds.

“2026 is expected to be a year of steady growth, focusing on deepening existing customer relationships and actively developing new markets,” said a Jiansheng Group representative.