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The repeated epidemics in Vietnam have not had much impact on Huali Group's performance for the time being.

On August 20, Huali Group announced the results for the first half of this year as of June 30. Revenue increased by 18.23% year-on-year to 8.195 billion yuan, and net profit attributable to shareholders of listed companies increased by 66.58% year-on-year to 1.291 billion yuan.

Huali Group stated in the announcement that revenue growth was mainly due to the continued recovery of sports demand and sports shoe consumption after the epidemic. In the first half of 2021, Huali Group sold 10,200 pairs of sports shoes, a year-on-year increase of 24.42%.

The main business of Huali Group is the development, design, production and sales of sports shoes. The main products include sports casual shoes, outdoor boots, sports sandals/slippers, etc. The brands that Huali Group serves include Nike, Converse, Vans, Puma, Under Armour, Columbia, and Deckers Brands' HOKA ONE ONE and UGG.

According to company calculations, Nike, Deckers Brands, VFC, Puma and Under Armour contributed 91.16% of Huali Group's revenue. Among them, Nike is the largest customer of Huali Group, contributing 2.815 billion yuan, accounting for 34.35% of Huali Group's revenue in the first half of this year.

From the perspective of gross profit margin and net profit margin, Huali Group has gradually recovered since the second quarter of 2020, and the gross profit margin in the first half of this year has been close to 2019.

Huali Group is also exploring new customers. In the first half of this year, orders from Huali Group's new customers, Arthurs and On, have been shipped, and New Balance has placed orders with the company.

As of the end of 2020, Huali Group has 21 shoe factories in Vietnam, China, Dominica, Myanmar and other places. In 2019, Huali Group's footwear output exceeded 180 million pairs. In 2021, Huali Group will continue to increase production capacity in Vietnam, while building new factories in Indonesia and Myanmar. This is also one of the main uses of the 3.887 billion yuan of funds raised by Huali Group through an IPO in April this year.

According to the 2021 semi-annual report, Huali Group's overseas capacity utilization profit has risen from 85.69% in the same period in 2020 to 96.92%. Huali Group stated in its financial report for the first quarter of this year that Huali Group closed its two smaller factories in Vietnam at that time, Vietnam Panduit and Vietnam Zhengda, and Vietnam Zhengda has completed the business cancellation procedures.

However, on August 11, Huali Group responded to the Vietnam epidemic on the investor interaction platform, saying: Some provinces in Vietnam are more severely affected, and the province where the company's factory is located is currently under control, and all factory production is normal.

However, Huali Group also mentioned the challenges brought about by the tight global supply chain. “The increase in the price of raw materials, the shortage of shipping containers, and the development of the epidemic in Vietnam have also brought certain challenges to the development of the industry and the company’s operations.”