Zheshang Securities has released a research report affirming its “Buy” rating on STELLA HOLDINGS (01836). The firm forecasts revenues of $1.57 billion, $1.64 billion, and $1.75 billion for the years 2025 to 2027, with net profit attributable to shareholders projected at $150 million, $170 million, and $190 million respectively. They anticipate a dividend payout ratio of 70% for 2025 and the company is committed to a buyback or special dividend of $60 million each year for 2025 and 2026, corresponding to a dividend yield of 10%.

The company enjoys a scarcity of capacity, with ample customer orders guaranteeing steady revenue growth, while new production capabilities in Indonesia and Bangladesh are expanding in an orderly manner. Although profit margins may fluctuate in the short term due to capacity ramp-up, the long-term positive trend remains unchanged. The report highlights positive feedback from customers for STELLA HOLDINGS in 2026, with strong order demand and successful expansion of new clients, including large-scale orders. The capacity expansion is currently a key variable; the company expects to add 20 million pairs of new capacity to support its business growth plans over the next three years. The new factory in Solo, Indonesia is expected to gradually increase its output to 7 million pairs, while the new factory in Bangladesh could still expand by 3 million pairs. Additionally, the new capacity at the exclusive factory for the largest client in Indonesia is expected to commence production in the second half of 2026, contributing an additional 10 to 15 million pairs of new capacity.