Soft International Group Ltd (SOFT INTL, 02569) reported robust interim results for the six months ended 30 June 2026, highlighting double-digit revenue and earnings growth driven by sustained contract manufacturing demand and rapid expansion of its branded portfolio.
Revenue and Profitability • Revenue advanced 25.0% year on year to RMB 549.31 million (H1 2025: RMB 439.32 million). • Gross profit climbed 27.0% to RMB 186.88 million, nudging gross margin up 0.5 ppt to 34.0%. • Profit attributable to owners rose 9.2% to RMB 33.33 million, despite higher selling expenses tied to e-commerce and brand promotion. • Effective tax rate fell to 9.6% (H1 2025: 17.1%) following the absence of IPO-related costs and a higher contribution from preferentially taxed subsidiaries.
Segment Performance • Contract Manufacturing: Revenue grew 16.5% to RMB 308.60 million, buoyed by new customers and stronger demand for adult incontinence products. Segment gross margin eased to 29.6% (H1 2025: 31.7%) on higher raw-material costs. • Branded Products: Sales surged 39.4% to RMB 174.80 million, propelled by e-commerce channels, new feminine-care launches and celebrity endorsement. Gross margin improved to 52.1% (H1 2025: 48.1%). • Nonwoven Fabrics & Others: Revenue increased 34.2% to RMB 65.88 million; gross margin edged up to 6.8%.
Product Highlights • Feminine-care sales jumped 56.5% to RMB 187.30 million, reflecting product upgrades and marketing efforts. • Adult incontinence sales soared 162.4% to RMB 39.10 million, leveraging demographic trends and policy support in China.
Cost and Expense Dynamics • Cost of sales rose 24.1% to RMB 362.43 million, broadly in line with top-line growth. • Selling & distribution expenses expanded 37.6% to RMB 116.36 million, driven by online promotion and logistics spend. • R&D outlays increased 22.7% to RMB 14.61 million; finance costs fell 62.5% to RMB 0.26 million following lower borrowings.
Balance Sheet and Liquidity • Cash and cash equivalents stood at RMB 28.92 million (31 Dec 2025: RMB 73.77 million). • Interest-bearing borrowings halved to RMB 20.00 million, cutting the gearing ratio to 3.7% (31 Dec 2025: 8.0%). • Inventory rose 18.7% to RMB 63.58 million, reflecting capacity additions; trade receivables increased 28.7% to RMB 200.73 million alongside higher sales. • Capital expenditure commitments expanded to RMB 49.13 million, aligned with new production lines and an upcoming Shishi City nonwoven facility scheduled for completion in H2 2026 and operation in 2027.
Outlook and Strategy Management targets continued strengthening of contract manufacturing partnerships and faster growth in branded products via direct-to-consumer channels. Ongoing investments in automation, capacity expansion and sustainable materials are expected to underpin long-term competitiveness.
Dividend No interim dividend was declared for H1 2026.
Compliance and Governance The company affirms adherence to Hong Kong’s listing requirements, maintains a public float above 25%, and reports no breaches of international sanctions or material post-period events.