Star Shine Holdings Group (1440) investor relations material

Executive summary

• Revenue for H1 2026 declined 43.6% year-over-year to RMB162.8 million, mainly due to a sharp drop in footwear sales from ongoing US-China tariffs and intensified competition.

• Net profit reached RMB24.2 million, reversing a net loss of RMB22.5 million in H1 2025, driven by strong IP merchandise segment performance and RMB27.3 million in fair value gains from strategic investments.

• The group is shifting resources away from lace and dyeing, focusing on IP merchandise and AI-driven operational upgrades.

• Gross profit increased 14.8% year-over-year to RMB32.1 million, mainly from IP merchandise.

Financial highlights

• Footwear revenue dropped from RMB248.9 million to RMB72.5 million, now 44.5% of total revenue (down from 86.2%).

• IP merchandise revenue reached RMB46.7 million, with strong profit contribution.

• Other gains of RMB24.4 million (vs. RMB1.2 million loss in H1 2025) were mainly from fair value gains on investments.

• Selling and distribution expenses fell 64.7% to RMB5.1 million due to commission cancellation.

• Administrative expenses rose to RMB23.3 million, mainly from a RMB2.5 million impairment on loans to a joint venture.

Outlook and guidance

• The group anticipates stricter environmental regulations and is prioritizing compliance and cost efficiency.

• Strategic focus is on expanding IP merchandise, leveraging AI for operational efficiency, and e-commerce growth.

• Disciplined capital allocation and continuous improvement in production, cost control, and R&D are key priorities.