Summary
Fuxing China Group Limited was listed on the Mainboard of Singapore Exchange (SGX) in September 2007. Established in 1993, Fuxing China has systematically scaled its operations over three decades to become the fourth-largest zipper manufacturer globally measured by sales value. The Group has three key business segments, including sales of zipper chains and sliders, trading of textile raw materials, and zipper processing services, which are strategically located across mainland China and Hong Kong. Fuxing China markets its product portfolio under the proprietary "3F" brand, an acronym underscoring its commitment to high-quality manufacturing and customisation. Direct-to-Brand Strategy to Enhance Margins. Fuxing China has been pivoting towards direct sales to brand owners, reducing its reliance on contract manufacturers and intermediaries. By engaging brands earlier in the product design process, the Group aims to shift from supplying standardised zippers to providing more engineered, value-added fastening solutions across sportswear, workwear, and outdoor lifestyle apparel. The Group has disclosed that its direct-to-brand customer base has expanded to include a broader range of international and domestic brands, including Reebok, Mizuno, ellesse, Joma, Zpacks, Bosideng, CAMEL, Santic, QIAODAN, FIRS, and Mark Fairwhale, with these customers having commenced recurring order flows. Direct engagement with brand owners should enhance operating margins, order visibility, product responsiveness, and cross-selling opportunities, while also supporting a shift towards a higher value-added product mix. Recently Announced Formal dividend policy. On 31 March 2026, Fuxing China announced a dividend policy targeting a minimum 15% annual payout for the next three financial years, and at the 29 April 2026 AGM shareholders approved the FY25 final dividend of RMB 0.15 per share, the share buy-back mandate, and the Fuxing China scrip dividend scheme. As we expect growth in the coming years, we have forecast dividend payout to be similar to FY25. This translates to a very attractive above the market yield of 4.2% in FY26 and 6.7% in FY27. Potential for Value Unlocking with Wide Disparity to NAV. The Company's share price of S$1 is just about 20% of the Group's net asset value per share stood at S$5.40 (as at 31 December 2025). With the formal dividend policy, we believe that it reflects the Company's confidence in its underlying business fundamentals and future growth trajectory, while signalling a more proactive and disciplined approach to capital allocation, with a clear focus on enhancing shareholder returns and unlocking longterm shareholder value. Placement and Capital Allocation for Technological Upgrades. The Group has completed a share placement that raised S$1.25 million in gross proceeds with the issuance of 3.0 million new shares at an issue price of S$0.415 each in November 2025. Specifically, 100% of the funds will be directed towards technological research and development, alongside targeted upgrades to the Group's intelligent manufacturing equipment and assembly lines.
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