Broker: UOB Kay Hian
Date of Report: Thursday, 21 August 2025
Crystal International Group Delivers Robust 1H25 Performance and Upgrades Outlook: Margin Expansion, Strong Order Visibility, and Strategic Growth
Crystal International Group: Overview and Investment Case
Crystal International Group (HKEX: 2232), a leading manufacturer of casual wear, denim, underwear, sweaters, and sports garments, continues to impress the market with its strong 1H25 performance and an optimistic outlook into 2026. UOB Kay Hian maintains its BUY rating, raising the target price to HK$7.07, signaling a potential upside of 16.3% from the current price of HK$6.08.
Key Stock Information
- Share Price: HK\$6.08
- Target Price: HK\$7.07
- Market Cap: HK\$17,345m (US\$2,224m)
- Shares Issued: 2,853m
- Major Shareholder: Lo Lok Fung Kenneth & Family (76.6%)
- Sector: Consumer Discretionary
- Bloomberg Ticker: 2232 HK
- 2025 NAV/Share: US\$0.58
- 2025 Net Debt (Cash)/Share: (US\$0.12)
1H25 Results: Accelerating Growth Across All Segments
Crystal International delivered a solid set of results for 1H25, outperforming expectations and highlighting its strengths in production efficiency and market responsiveness.
| Metric |
1H25 |
1H24 |
YoY Change |
HoH Change |
| Revenue |
US\$1,229m |
US\$1,094m |
+12.4% |
-10.6% |
| Net Profit |
US\$98m |
US\$84m |
+16.8% |
-15.7% |
| Gross Margin |
19.7% |
19.5% |
+0.2ppt |
0.0ppt |
| Operating Margin |
9.4% |
8.8% |
+0.6ppt |
0.0ppt |
| Net Margin |
8.0% |
7.7% |
+0.3ppt |
-0.1ppt |
Segment Performance Highlights
- Sweater: Outstanding growth, up 29.2% YoY to US\$105m
- Sportswear & Outdoor Apparel: US\$313m, up 12.4% YoY
- Denim: US\$262m, up 10.3% YoY
- Lifestyle Wear: US\$340m, up 11.4% YoY
- Intimate: US\$210m, up 9.5% YoY
Dividend Policy
- Interim Dividend Per Share: 16.3 HK cents (~2.1 US cents)
- Interim Dividend Payout Ratio: 60% (unchanged from 1H24)
Strategic Workforce Expansion and Productivity Initiatives
Crystal achieved its full-year target of adding 4,000 workers in 1H25, reaching a workforce of 79,000 by June. This move was supported by renewed confidence among apparel brands and improved procurement strategies as trade policy uncertainties subsided. Notably:
- No further worker additions planned for 2025; focus shifts to retention and training
- Enhanced worker efficiency and automation are projected to drive further productivity in 2H25
Geographical Diversification and Market Expansion
To offset uncertainties in the US market, Crystal is aggressively pursuing growth in Europe and Asia. Key developments include:
- Flagship partnership with a leading European brand; shipments of five-pocket denim jeans commence in 2H25
- Strong order visibility into 3Q26, with robust demand from major clients such as Adidas and Lululemon
- Positive outlook for intimates and sweaters with Uniqlo
Production Base Expansion
Crystal is actively assessing new production bases in regions neighboring Europe to reduce lead times and boost responsiveness. This initiative is driven by customer interest and is expected to further diversify regional sourcing options beyond its established Southeast Asia-centric footprint.
Capital Expenditure and Automation Strategy
Crystal maintains a disciplined capex approach to support vertical integration and automation upgrades:
- 2025 Capex: US\$150m (vs US\$160m in 2024)
- 2026 Capex: US\$150m–200m, contingent on new plant in Egypt
Financials: Strong Growth, Healthy Margins, and Attractive Valuation
Crystal’s forward-looking financials showcase robust growth and improving profitability, supported by operational efficiency and market expansion.
| Metric |
2024 |
2025 |
2026F |
2027F |
2028F |
| Net Turnover (US\$m) |
2,177 |
2,470 |
2,749 |
3,038 |
3,360 |
| Gross Profit (US\$m) |
418 |
486 |
546 |
608 |
676 |
| Net Profit (US\$m) |
163 |
200 |
234 |
268 |
303 |
| EPS (cents) |
5.7 |
7.0 |
8.2 |
9.4 |
10.6 |
| Dividend Yield (%) |
3.0 |
6.4 |
6.9 |
7.8 |
8.9 |
| Net Margin (%) |
7.5 |
8.1 |
8.5 |
8.8 |
9.0 |
| ROE (%) |
11.8 |
13.5 |
14.8 |
15.8 |
16.7 |
Valuation
- Crystal trades at 8.7x one-year forward PE, above its 2018-25 historical mean of 7.9x
- Peers’ average 2025F PE: 11.0x
- Dividend yield projected at 6.9%/7.8%/8.9% for 2025-2027, assuming a 65% payout ratio
Profit & Loss, Balance Sheet, and Cash Flow Highlights
Crystal’s financial discipline is evident across its P&L, balance sheet, and cash flow statements.
| Metric |
2025 |
2026F |
2027F |
2028F |
| Net Turnover (US\$m) |
2,470 |
2,749 |
3,038 |
3,360 |
| EBITDA (US\$m) |
318 |
358 |
405 |
447 |
| Operating Profit (US\$m) |
233 |
265 |
302 |
340 |
| Net Profit (US\$m) |
200 |
234 |
268 |
303 |
| Gross Margin (%) |
19.7 |
19.8 |
20.0 |
20.1 |
| ROE (%) |
13.5 |
14.8 |
15.8 |
16.7 |
| Net Debt/(Cash) to Equity (%) |
(16.4) |
(20.7) |
(21.2) |
(23.9) |
Crystal International: Investment Conclusion
Crystal International Group stands out for its resilient growth, margin expansion, and robust order visibility into 2026. The company’s strategic moves—ranging from geographical diversification, automation, and capex discipline to strong client relationships—have positioned it as a leader in the apparel manufacturing space.
With a healthy balance sheet, attractive dividend yield, and ongoing efficiency improvements, Crystal offers compelling value for both growth and income-focused investors. UOB Kay Hian’s upgraded target price and reinforced BUY rating underscore the confidence in Crystal’s operational execution and long-term shareholder value creation.
Disclaimer and Regulatory Information
This article is for informational purposes only and does not constitute investment advice. Please consult with a financial adviser regarding the suitability of investments. The content is subject to applicable regulations in each jurisdiction.
