Lever Style is an asset-light apparel supply chain solutions provider, offering design, sample development, and technical packages to clients worldwide. To date, the company serves 186 global fashion brands.

Growth resumed following AAG integration – This is the first set of interim results after the acquisition of Active Apparel Group (AAG). Revenue growth rebounded, driven by the integration of AAG, rising 23.8% YoY to US$113mn for the 6-mth ended June 2026 (compared with -10.2% in FY25 and -4.1% in 1H25), which expanded both its operational scale and client portfolio. GPM remained largely steady at 27.9%, versus 28.7% in 1H25. However, due to one-off expenses related to the AAG acquisition, net profit declined 1.8% YoY to US$5.44mn, with net margin easing to 4.8% (from 5.9% in 1H25). The company declared an interim dividend of 3.0 HK cents per share at a payout ratio unchanged at 50%. The company had a net cash position of US$27.3mn with no debt at the end of Jun 2026, providing ample financial flexibility to support continued M&A activities.

Profitability to improve in 2H26 – Going into 2H26, as the acquisition effect of AAG blends in, overall profitability is expected to improve.  AAG is anticipated to contribute positively in 2H26, with its profit margins gradually approaching those of the company's legacy business. More than 30 new customers gained through the acquisition now account for approximately 20% of total sales, serving as a strong growth driver. Furthermore, the acquisition is expected to generate cross-selling synergies across the combined brand portfolio, unlocking incremental growth potential.

Future evolution outlook – Moreover, the company will maintain its consistent approach to global M&A while actively seeking new opportunities. In parallel, Lever Style is advancing its digitalization and platformization strategy, which includes AI-driven workflow automation and a self-developed platform that connects demand with supply. This platform facilitates order matching and delivery, reducing turnaround time by 90%, thereby significantly enhancing operational efficiency and competitiveness. In the long run, this strategy is expected to drive both topline and bottom-line growth.

Our view: Historically, the second half tends to be better, accounting for about 55% of full-year revenue. Accordingly, we expect accelerated growth in the coming months, with full-year FY26 revenue estimated at approximately US$252mn (+25.7% YoY). (Amelia Deng)