Accelerate the Shift of Production Capacity from Shenzhen to Vietnam to Cater For Brand Partners’ Strong Order Demands

Adoption of Seven Innovative Technologies and Strictly Select Brand Partners and Optimise Product Portfolios to Enhance Profitability

(Hong Kong, 26 November 2018) Regina Miracle International (Holdings) Limited (“Regina Miracle” or the “Company,” together with its subsidiaries, collectively the “Group”) (HKEX: 2199), a leading global intimate wear company boasting an Innovative Design Manufacturer (“IDM”) business model, has announced its unaudited interim results for the six months ended 30 September 2018 (“1HFY2019” or the “Period”).

In 1HFY2019, the Group recorded a total revenue of HK$3,062.9 million (1HFY2018: HK$2,813.5 million), up 8.9% year-on-year. The Group’s gross profit for the Period rose by 12.7% to HK$658.1 million (1HFY2018: HK$583.8 million) and gross profit margin increased to 21.5% (1HFY2018: 20.7%). During the Period, the Group benefited from the continuous increase of production capacity and efficiency in its Vietnamese facilities and has recorded a continuously improving profit margin. Net profit increased by 39.9% to HK$133.7 million (1HFY2018: HK$95.6 million), with a net profit margin of 4.4% (1HFY2018: 3.4%). The Board has resolved to propose an interim dividend of HK3.6 cents per ordinary share for the six months ended 30 September 2018 (1HFY2018: 2.5 cents) and the Group’s dividend policy remains as distributing no less than 30% of its net profit for the financial year.

Mr YY Hung, Chairman, Chief Executive Officer & Executive Director of Regina Miracle, said, “Despite its impact on the global economy and trade since early 2018, the escalating China-US trade dispute has presented Regina Miracle with opportunities for market share gain, given the Group’s early-mover advantage to establish its presence in Vietnam. Under the management’s well-arranged deployment of manufacturing resources, Regina Miracle has been able to capture timely opportunities during the drastic shifts in the trade situation and fulfill brand partners’ quest for overseas production in response to their demand for high volume orders. Moreover, we have prioritised the research, development and adoption of our Seven Innovative Technologies in 2018 which helped us to develop well-received comfortable products for our partners and has driven the steady development of our sales performance.”

Business Review

Innovative technologies are welcomed by the market; bra-related products recorded stable sales growth
During the Period, bras and intimate wear products remained as the biggest revenue contributor of the Group. Revenue from this segment for the year increased by 4.0% year-on-year to HK$2,372.9 million (1HFY2018: HK$2,282.7 million), accounting for approximately 77.5% of the Group’s total revenue (1HFY2018: 81.1%). Regina Miracle has effectively incorporated the Seven Innovative Technologies to develop innovative differentiated products for world-renowned brand partners and these products have been well-received by the market, which has further strengthened the collaborative ties between the Group and its newly-added global brand partners, resulting in a more balanced customer mix.

Gross profit and gross profit margin of the segment amounted to HK$521.2million and 22.0%, respectively (1HFY2018: HK$476.9 million and 20.9%, respectively). During the Period, the efficiency of Vietnamese Factories A and B continued to improve, driving the expansion in the segment’s gross profit margin. However, as Factory C did not commence operation until the beginning of the Period and the training of newly joined production line staff was still underway, it partially offset the gains in gross profit margin of Factories A and B in Vietnam.

As for bra pads and other molded products business, since the Group strategically reserved a large portion of its bra pad capacity for in-house manufacturing of bra products, this segment’s revenue amounted to HK$258.0 million (1HFY2018: HK$272.0 million), representing 8.4% of the Group’s total revenue (1HFY2018: 9.7%). Gross profit and gross profit margin from the segment amounted to HK$55.2 million and 21.4% respectively (1HFY2018: HK$57.7 million and 21.2%). With the continuously improving production efficiency of Factory B in Vietnam, there has been an increase in the self-supply ratio of bra pads needed domestically by the Group’s Vietnamese factories, which will help ease the pressure from rising raw material prices.

Functional sports products experienced significant growth with expansion of both footwear and sportswear businesses

During the Period, revenue from functional sports products registered a significant increase of 67.0% to HK$432.0 million (1HFY2018: HK$258.7 million), which represented 14.1% of the total revenue. Gross profit and gross profit margin from the segment amounted to HK$81.7million and 18.9% respectively (1HFY2018: HK$49.2 million and 19.0% respectively).

During the Period, the Group effectively applied its technical know-how from the seamless bonding
craftsmanship of its intimate wear products to sportswear products, hence unique products have been developed, which lead to a satisfactory double-digit increase in sales of sportswear products. In respect of footwear products, the smooth collaboration between the Group and its new casual footwear brand partner from the US added last year has resulted in a rapid increase in orders within just one year. With both sportswear and footwear products recording satisfactory progress, and in turn drives the continuous expansion of the scale of the Group’s functional sports products business as a whole during the Period.

Improving production capacity layout in Vietnam to cater for the greater demand from major brand partners as trade war looms

During the Period, the Group continued to bolster its production capacity and efficiency in Vietnam, so as to coordinate the greater demand of orders from major brand partners for Vietnamese production bases under the shadow of the looming trade war. Meanwhile, the Group has also actively promoted automated production models boosted by information technology in a bid to enhance production management and efficiency.

As at 30 September 2018, the three Vietnamese factories had a total of approximately 27,500 staff members, among which skilled workers at production lines accounted for an increasing proportion in the first two facilities and thus has driven the steady improvement of production efficiency. With its production commencing in April this year, Factory C is mainly engaged in producing bras, intimate wear and functional sportswear. The Group has incorporated its latest self-developed automated production equipment into part of Factory C’s manufacturing processes, which is conducive to boosting the factory’s efficiency and stability in the long run.

During the Period, the Group continued to optimise its production capacity layout in Vietnam. Factory D and Phase 1 Factory E were under construction and are expected to commence production during the second quarter of 2019. Factory D will be equipped with the Group’s latest self-developed automation equipment and centred on three types of innovative craftsmanship for seamless bonding (from the Seven Innovative Technologies) to produce multiple categories of products. Phase 1 of Factory E, on the other hand, is planned to be furnished with production lines for bras and intimate wear and apparel, and equipped with in-house screen printing capabilities. Production capacity for footwear products will also be reserved in Factory E to support the steady development of the footwear business.

Primarily engaged in research, development and production, the Shenzhen factory will continue to be responsible for products with higher technical requirements and the supply of products sold to the domestic Chinese market for brand partners. As at 30 September 2018, the Group had nearly 12,000 staff members at the Shenzhen facility.

Carefully allocate production capacity between regions, striking a reasonable balance between business growth and improving profitability

Facing uncertainty brought by the international trade situation, coupled with the challenges posed by rising production costs and labour supply shortages in Shenzhen, the Group will take into account a number of factors to allocate and adjust the production capacities between its Vietnamese and Shenzhen factories as appropriate. In particular, the shift of production capacity from Shenzhen to Vietnam will be accelerated, to capture the ever-growing demand from international brand partners for Vietnamese production bases. The Group will also seek further opportunity for establishing production sites to prepare for longer-term business expansion. To effectively utilise its production capacity and cope with the demand of orders from brand partners, the Group will strengthen its strategy of strictly selecting brand partners and optimising product portfolios, with an aim to strike a reasonable balance between promoting steady development of its business scale and improving profitability, attaining the objective of optimum profit and laying a solid foundation for long-term, healthy development.

Mr. Hung concluded, “Looking ahead, to cope with the challenges arising from the macroeconomic environment, we will uphold our mission as an innovative design manufacturer to consolidate our industrial leadership through pioneering innovative technologies. We will continue to seek breakthroughs in technological innovation, work with suppliers to develop more proprietary production machinery, and create more unique products with higher added value for our brand partners in order to enhance and further explore collaborative ties with world-renowned brand partners. We will also work to secure satisfactory returns for its shareholders whilst promoting business growth.”

加快將產能由深圳逐步轉移至越南回應國際品牌殷切需求
善用七大創新技術嚴選品牌合作夥伴及優化產品組合以達致理想利潤

（2018年 11月 26日 香港訊 ））— 全球領先的貼身內衣創新設計製造商 Innovative Design Manufacturer，「 IDM」） 維珍妮國際（控股）有限公司 （「維珍妮」或「公司」，連同其附屬公司統稱「集團」）（股份代號： 2199）公 布 截至 2018年 9月 30日止 6個月（「 2019財年上半年」或「期內」） 的未經審核中期業績。

於2019財年上半年，集團錄得收入總額港幣3,062.9百萬元（2018財年上半年：港幣2,813.5百萬元），按年上升8.9%；集團的毛利增長12.7%至港幣658.1百萬元（2018財年上半年：港幣583.8百萬元），毛利率提升至之21.5%（2018財年上半年：20.7%）。期內，受惠於越南廠房產能及效率的持續提升，集團的利潤率持續錄得改善。純利增長39.9%至港幣133.7百萬元（2018財年上半年：港幣95.6百萬元），而純利率為4.4%（2018財年上半年：3.4%）。董事會決議宣派截至2018年9月30日止6個月的中期股息每股普通股3.6港仙（2018財年上半年：2.5港仙），並維持分派財政年度純利不少於30%的股息政策。

維珍妮主席、首席執行官兼執行董事洪游奕先生表示： 「 自2018年初開始，中美貿易爭端升溫，為環球經濟及貿易局勢帶來衝擊，但對於早著先機於越南佈局的維珍妮而言，反而帶來增加市場份額的契機。經管理層完善的生產資源部署，讓我們在貿易局勢急劇轉變時及時捕捉機遇，滿足品牌合作夥伴對中國以外生産的殷切訂單需求。此外，我們亦於2018年重點研發及採用七大創新技術，令本集團得以為合作夥伴開發深受市場歡迎的舒適產品，帶動本集團銷售穩步發展。」

業務回顧
創新技術深 受市場歡迎，胸圍相關產品 的銷售 穩步 增長期內，胸圍及貼身內衣產品繼續為集團的主要收益來源。該分部期內收益按年上升 4.0%至港幣2,372.9百萬元 2018財年上半年：港幣 2,282.7百萬元） ），佔集團總收益 約 2018財年上半年： 。 維珍妮有效地善用七大創新技術，為國際知名的品牌合作夥伴開發具差異化的創新產品，並 深受 市場歡迎，進一步加強了集團與新增國際品牌伙伴之合作關係，推 使集團的客戶組合更趨均衡。

此分部毛利 及 毛利率 分別 為港幣 521.2百萬元 及 2018財年上半年：分別為港幣 476.9百萬元及 20.9%）。期內 越南 A廠及 B廠效率持續提升，帶動分部毛利率改善；但 由於越南 C廠於期初才開始營運，期內正值新加入生産綫員工的培訓期，因而 抵銷了 部分 越南 A廠及 B廠毛利率提升的正面影響。

至於胸杯及其他模壓產品方面，集團策略性地保留了大部份胸杯作內部生產之用，因此該分部業務的收益於期內貢獻港幣258.0百萬元（2018財年上半年：港幣272.0百萬元），佔總收益8.4%(2018財年上半年:9.7%)。分部毛利及毛利率分別為港幣55.2百萬元及21.4%（2018財年上半年：分別為港幣57.7百萬元及21.2%）。隨著越南 B廠生產效率持續提升， 增加 了集團越南廠房所需胸杯的本地自供比例，將有助舒緩原材料價格持續上漲的壓力。

功能性運動類產品增長勢頭強勁，鞋類及運動服裝產品進展理想

期內，功能性運動類產品 分部 收入大幅增長 67.0%至港幣 432.0百萬元（ 2018財年上半年：港幣258.7百萬元），佔集團總收入的 14.1%。 此分部毛利為港幣 81.7百萬元，毛利率為 2018財年上半年：分別為港幣 49.2百萬元及 19.0%）。
期內，集團有效地將生產貼身內衣產品的無縫工藝應用至運動服裝產品上，開發出獨特的產品，令運動服裝產品訂單錄得滿意的雙位數增長。至於 鞋類產品 方面 ，集團與去年 新 增的美國休閒鞋類品牌夥伴之間 合作 順暢， 令 訂單在短短一年內迅速增加。由於運動服 裝 及鞋類產品均錄得令人滿意的進展， 促使 集團的功能性 運動產 品 整體 業務規模於期 內 持 續擴大。

完善越南產能佈局於貿易戰中 抓緊市場機遇

期內，集團繼續積極提升越南產能的擴展及效率，以配合各大品牌合作夥伴在貿易戰的陰霾下對越南生產基地更熱切的訂單需求。同時，集團亦積極推動具備信息化的自動化生產模式，以加強生產管理及提升效率。

越南三間廠房於2018年9月30日合共約有27,500名員工，當中首兩間廠房的熟練生産綫員工比例不斷擴大，帶動生產效率穩步提升。今年4月投產的C廠主要生產胸圍及貼身內衣以及功能性運動服裝，期內按規劃逐步招聘生産綫員工。C廠部分工序引入了集團最新研發的自動化生產設施，有助該廠房長遠提升效率及穩定性。

集團於期內繼續優化其在越南的產能佈局，正在興建的越南D廠及E廠一期預計於2019年第二季投產。越南D廠將以集團最新研發的自動化設備為本，並以七大創新技術中的三大創新無縫拼接工藝爲重心，生產多種產品類別；E廠一期則計劃設有胸圍及貼身內衣、服裝生產線，並具備內部絲網印刷能力，同時預留了若干產能用作生產鞋類產品，以支持鞋類產品業務的發展。

至於以研發及生產為主的深圳廠房，主要負責技術要求較高的產品，以及為品牌夥伴供應銷售至中國市場的產品。於2018年9月30日，集團在深圳的廠房有近12,000名員工。

審慎配置各地產能，在業務增長與提升利潤之間取合理平衡

面對國際貿易形勢所帶來的不確定性，以及深圳生產成本上升及勞動力供應短缺等挑戰，集團將在越南及深圳廠房的產能配置上考慮多項因素，適當分配 及調節 越南及深圳廠房的產能， 並 加快將產能由深圳轉移至越南 ，以把握國際品牌夥伴對越南生產基地越趨龐大的需求。集團亦將繼續尋求進一步建立生產基地的機遇，為更長遠的業務拓展做好準備。為善用產能及面對品牌夥伴的訂單需求，集團將加強嚴選品牌合作夥伴及優化產品組合的策略，務求於推動業務規模穩步發展及優化利潤之間取得合理平衡，以達至最理想利潤為目標，為長遠更健康發展打穩根基。

洪先生總結:「展望未來，為應對宏觀經濟環境的挑戰，我們將秉持創新設計製造商的宗旨，透過領導行業的創新技術，鞏固本集團在行內的領先地位。此外，我們會繼續在技術創新方面尋求突破，與供應商開發更多專利生產機器，為品牌合作夥伴創造更多獨一無二及高附加值的產品，以加強及進一步開拓與國際知名品牌夥伴的合作關係，在推動業務增長的同時，致力為股東爭取理想的回報。」