(Yicai) Aug. 23 -- Huali Industrial Group posted a 29 percent surge in net profit in the first six months from a year earlier as a rebound in sporting enthusiasm in China after the pandemic boosts footwear sales by Nike and other foreign sportswear giants to which Huali is a supplier.

Huali raked in net profit of CNY1.9 billion (USD266.2 million) in the six months ended June 30, the Zhongshan-based firm said yesterday. Revenue soared 25 percent to CNY11.5 billion (USD1.6 billion). This is a big improvement from last year when net profit dipped 1 percent year on year and revenue slid 2 percent.

Orders began to pick up in the fourth quarter last year and inventory among sportswear companies returned to normal levels in the second half of 2023, said Huali, which counts Nike, Converse, Puma and Under Armour among its clients, in its financial report.

In the first half, Huali delivered 19 percent more sneakers than a year earlier at 108 million pairs, the firm said.

As consumption picks up and large sporting events and outdoor activities become a key part of Chinese people's daily and social lives, demand for sneakers is growing steadily, Huali said. Consumers are also turning to specialized products so there are more orders for subcategories of sporting shoes, it added.

The trend is reflected in the earnings of multinational athletic footwear and apparel companies in China. Nike’s China revenue advanced 7 percent in the fourth fiscal quarter ended May 31 to USD1.9 billion, not including currency fluctuations. The Oregan-based company has now logged growth in China for seven quarters in a row. And Adidas’ China revenue soared 9 percent in the second quarter year on year to EUR822 million (USD914.6 million), expanding for the fifth straight quarter.

Huali is shifting some manufacturing capacity overseas, due to labor costs and the international trade environment, and its plants in Vietnam and Indonesia were put into production in the second quarter, according to the financial report.

But the new factories’ output will only reach a relatively high level after several years of operation due to the training needed by local workers and the collaboration levels among different divisions.

Huali’s share price [SHE:300979] dipped 1.1 percent to finish the day at CNY63.83 (USD9). The stock has gained 24 percent in value so far this year.

Editors: Dou Shicong, Kim Taylor