Liwa Holdings (01346.HK) reported a 23.8% year-on-year increase in revenue for the first half of 2026, continuing to advance its technology-empowerment strategy.

Lihua Holdings (01346.HK) $LEVER STYLE(01346.HK) recently announced its interim results for the six months ended June 30, 2026. During the reporting period, the company achieved revenue of USD 113.2 million, a year-on-year increase of 23.8%; net profit was USD 5.4 million, up 1.8% year-on-year. Despite one-time costs from business integration following an acquisition, the company still achieved profit growth. The board declared a maintained interim dividend of HKD 3.0 cents per share.

The revenue growth in this period was primarily driven by the Group's completion of the acquisition of Active Apparel Group (AAG) business on January 2, 2026. AAG has been successfully integrated into Lihua's operational platform, laying the foundation for expanding the sportswear business, broadening the customer base, and enhancing long-term growth capabilities.

Stanley Szeto, Executive Chairman of Lihua Holdings, said, "In the first half of 2026, the Group returned to a path of revenue growth. Although the AAG integration process incurred one-time upfront costs, which had some impact on short-term profitability, these investments are necessary for achieving long-term value creation. With the major integration work largely completed, we expect to gradually realize scale effects and operating leverage in the future, supporting sustained improvement in profitability."

As a key component of its long-term strategy, Lihua Holdings continues to advance its digital and technological capabilities, accelerating its transformation into a technology-enabled apparel platform.

During the reporting period, the company independently developed and launched a Product Lifecycle Management (PLM) system, further enhancing product development and supply chain management efficiency, increasing workflow transparency, shortening time-to-market, and reducing resource waste in its asset-light supply chain. Simultaneously, leveraging its internal R&D team, the company developed a customized AI engine to improve operational efficiency in core business scenarios such as order follow-up management and factory collaboration, continuously strengthening its competitive edge with proprietary technology.

Regarding the market, the United States, as Lihua's core market, demonstrated resilient overall consumption performance in the first half of 2026. Management believes the current market exhibits a clear "K-shaped divergence" trend: intense competition and increasing price pressure in the mid-to-low-end consumer market, while demand from high-income consumer groups remains relatively stable. Given its long-term focus on serving high-end designer brands and premium fashion brands, Lihua's business portfolio is highly aligned with the more resilient high-end consumer market, providing strong risk resistance in the current market environment.

Looking ahead, the company will continue to advance its long-term growth strategy around three key tasks: first, driving the AAG business into a profit release phase, expecting it to start contributing to profits from the second half of 2026 and aiming to gradually approach the profitability level of the Group's traditional business by 2027; second, leveraging the upgraded digital platform and supplier network to further release operating leverage and improve overall operational efficiency; third, on the basis of completing the AAG integration and validating platform scalability, continuously evaluating strategically valuable M&A opportunities to further expand product capabilities and global production footprint.

Stanley Szeto said, "With the AAG integration largely completed, digital capabilities continuously improving, and business layout further optimized, we remain confident in the Group's long-term development prospects. In the future, we will continue to adhere to the technology-enabled strategy, constantly enhancing operational efficiency and profitability to create long-term value for customers, partners, and shareholders."

The board also announced that for the six months ended June 30, 2026, the interim dividend is maintained at HKD 3.0 cents per share, unchanged from the same period last year, to reward shareholders for their long-term support and reflect management's confidence in the Group's cash flow and long-term development prospects.