Zheshang maintains a "buy" rating on STELLA HOLDINGS (01836) and commits to repurchasing $60 million worth of shares or paying special dividends annually from 2025 to 2026.

Zheshang released a research report stating that it maintains a "buy" rating on STELLA HOLDINGS (01836), with expected revenues of $1.57/1.64/1.75 billion USD for the years 2025-2027, and net profits attributable to shareholders of $150/170/190 million USD respectively. It is expected that the dividend payout ratio will be maintained at 70% for 2025, and the company has committed to a share buyback or special dividend of $60 million USD annually for 2025-2026, corresponding to a dividend yield of 10%. The company's scarce production capacity and abundant customer orders ensure stable revenue growth, with orderly expansion of production capacity in Indonesia and Bangladesh. Despite short-term fluctuations in profit margins due to capacity ramp-up, the long-term trend remains positive. The report also states that customer feedback for 2026 from Jiu Xing has been positive, with strong order demand and smooth expansion of new customers, as well as abundant large-scale orders and stable orders from the largest customer. Capacity expansion is currently a key factor, with the company expecting to add 20 million pairs of new capacity to support future business growth over the next 3 years. The new factory in Soloro, Indonesia is expected to gradually increase production capacity by 7 million pairs, while the new factory in Bangladesh is expected to expand by 3 million pairs. The exclusive factory for the largest customer in Indonesia is expected to start production in the second half of 2026, contributing 10-15 million pairs of new capacity.