CMB International has initiated coverage on CRYSTAL INTL (02232) with a "Buy" rating and a target price of HK$8.6. The bank forecasts the company's 2025E-2027E revenue at RMB2.74 billion, RMB3.00 billion, and RMB3.30 billion, representing year-on-year growth of +10.8%, +9.5%, and +10.2%, respectively. Gross margins are expected to be 19.9%, 20.1%, and 20.2%, while net profit attributable to shareholders is projected at RMB230 million, RMB260 million, and RMB290 million, up +14.7%, +12.8%, and +11.1% YoY.

The report highlights that CRYSTAL INTL's growth is driven by market share expansion among core clients and category benefits, with sportswear and denim leading the charge. Casualwear, sportswear, and denim are the top three categories, accounting for 28%, 25%, and 21% of H1 2025 revenue, respectively. The sportswear segment has been a key growth driver since the company entered the market in 2016 through the acquisition of Vista, achieving an 18% CAGR from 2019 to 2024. CRYSTAL INTL has significantly increased its share with clients such as Adidas and Lululemon.

As a major supplier to Levi's, A&F, and GAP, the company's denim segment benefits from the retro fashion trend. Meanwhile, the sweater and innerwear categories continue steady growth, supported by cross-category innovations like functional sweaters and lifestyle innerwear, with sweater revenue up 29% YoY in H1 2025.

CRYSTAL INTL operates over 20 factories across Southeast Asia and China, with overseas production accounting for approximately 85% of capacity—60% of which is in Vietnam, with the rest distributed across Bangladesh, Cambodia, and Sri Lanka. As of June 30, 2025, the company employed 79,000 workers, an increase of 9,000 YoY, with a focus on improving labor efficiency in the second half of the year.

Since 2021, CRYSTAL INTL has pursued vertical integration through acquisitions and in-house fabric production. The company expects self-sufficiency in casual and sportswear fabrics to reach around 20% in 2025, enhancing medium-to-long-term profitability potential.