Fujian Septwolves Industry Co Ltd

China's first-half 2026 apparel earnings season shows growth concentrating among stronger brands while legacy casualwear players lose ground. Biemlofe posted revenue growth of 23.7 percent with online sales rising more than 100 percent, and Balabala generated 4.83 billion yuan ($677 million) in first-half revenues, accounting for 71.8 percent of parent company Semir's total revenue. Dazzle Fashion, Ellassay, JNBY and Biemlofe all reported gross margins above 65 percent, while Erdos reported a 43.2 percent increase in first-half net profit. On the losing side, Heilan Home grew revenue 7.4 percent but net profits declined 5.9 percent, Semir's casualwear business grew just 3.4 percent, and Peacebird and Septwolves continue to work through inventory and channel restructuring. China's broader apparel market still grew in the first half, with retail sales of apparel, footwear and knitwear increasing 6.7 percent year-over-year, yet sales at above-quota specialty stores fell 8.7 percent.

Septwolves released its 2026 interim report. The company's total operating revenue was 1.415 billion yuan, and net profit attributable to the parent company was negative 27.3 million yuan, swinging from profit to loss. This was a decrease of 188 million yuan compared with the same period last year, down 117.01 percent year on year. Net cash inflow from operating activities was 72.72 million yuan. The asset-liability ratio was 28.34 percent, and the gross margin was 50.93 percent, down 1.33 percentage points from the same period last year. Diluted earnings per share were negative 0.04 yuan, down 117.39 percent year on year.

A US Department of Homeland Security working group has updated its import restriction list targeting China, adding brands including Qiaqia Food, Synear Foods, and Septwolves, effective August 3. Qiaqia Food's overseas revenue in 2025 accounts for less than 9 percent of total revenue, with direct exports to the US making up an extremely low share. The company expects a net profit attributable to shareholders of between 240 million and 265 million yuan for the first half of the year, a sharp year-on-year increase of 170.8 percent to 199.0 percent. Its share price rebounded after a slight pullback following the announcement. Septwolves' overseas revenue in 2025 was just 7.81 million yuan, representing 0.25 percent of total revenue, with negligible exports to the US. The company forecasts a first-half loss of 19.5 million to 29 million yuan, mainly due to fair value changes in trading financial assets, while its non-recurring net profit is expected to grow by 301.97 percent to 494.37 percent. Its share price rose against the market trend after the list was published. Synear Foods is not listed on the A-share market. Its frozen products involve high cold-chain costs and limited overseas expansion, and it already built and put into operation a local factory in Los Angeles back in 2018, which is not subject to this import ban targeting Chinese factories. All three companies have their core markets domestically, with limited direct export volumes to the US. The secondary market reaction has been calm, with no sharp declines.

Septwolves disclosed an earnings forecast, expecting an attributable net loss of 19.5 million to 29 million yuan in the first half of 2026, compared with a profit of 160 million yuan in the same period last year. Deducted non-recurring net profit is expected to be 117 million to 173 million yuan, a year-on-year increase of 301.97 percent to 494.37 percent. The company said the attributable net loss was mainly affected by non-recurring gains and losses, with an estimated impact of between negative 155 million and negative 186 million yuan, of which investment losses on held-for-trading financial assets had a relatively large impact.