When revenue grows less than 4% but net profit surges over 23%, the scissors gap in Jiansheng Group's H1 2026 report is uncommon in the textile OEM sector. It signals not just one company's operational efficiency, but a microcosm of how the knitted sportswear OEM chain seeks new profit anchors under cost pressure.
The Quality Behind the Numbers
According to the semi-annual report disclosed on August 3, H1 revenue reached 1.211 billion yuan, with net profit attributable to shareholders at 175 million yuan, up 3.40% and 23.23% year-on-year respectively. The profit growth rate is nearly seven times that of revenue, implying that profit expansion does not rely on scale growth but on improved per-unit output efficiency. The concurrent dividend plan of 3 yuan per 10 shares (tax included) continues the company's tradition of high cash dividends, following the 3.5 yuan per 10 shares for FY2025.
This profit structure is a bellwether for OEM companies. Typically, OEM models are constrained by client pricing power, limiting margin improvement. Jiansheng's significant margin uplift likely stems from three factors: cost advantages from overseas bases (e.g., Southeast Asian plants in Vietnam, Cambodia), a product mix shifting toward higher-value sportswear, and lean management compressing manufacturing expenses. For buyers, this means the pricing logic of OEMs is evolving from "cost-plus" to "efficiency-plus."
Industrial Transmission and Regional Impact
Jiansheng's case is not isolated. In recent years, domestic knitting OEMs have increasingly set up factories in Southeast Asia to circumvent tariffs and reduce labor costs. This industrial shift directly alters order structures for upstream fabric and yarn suppliers: some orders migrate with capacity, but domestic demand for high-count yarn and functional fabrics actually rises due to product upgrades. For fabric clusters like Keqiao in Shaoxing and Shengze in Jiangsu, export categories are shifting from commodity items to differentiated products.
Moreover, the escalating dividend intensity (over 3 yuan per 10 shares for two consecutive years) signals robust cash flow to the market. In an industry commonly plagued by long receivable cycles and high capital occupation, such high dividend capability implies stronger bargaining power in supply chain negotiations. The ripple effect is noteworthy: when leading OEMs thicken profits, their incentive to squeeze upstream prices diminishes, potentially leaving room for quality fabric suppliers to raise prices.
Practical Recommendations
For Buyers - Monitor OEM profit margins, prioritizing suppliers whose net profit growth significantly outpaces revenue, indicating reliable quality and delivery. - Leverage OEMs' overseas cost advantages by requesting comparative quotes between domestic and Southeast Asian plants to secure better terms. - Avoid chasing the lowest price alone; evaluate suppliers' dividend capacity and cash flow to mitigate supply disruption risks.
For Foreign Trade Enterprises - Learn from Jiansheng's overseas deployment by assessing the feasibility of setting up production or subcontracting links in Southeast Asia to hedge tariff and labor cost fluctuations. - Optimize product structure by developing sports and functional knitted categories, which offer higher margins and better hedge against raw material price swings. - Establish a financial health assessment mechanism, regularly reviewing partners' public financial reports and incorporating net margin and dividend records into supplier rating systems.
Competition in textile OEM has shifted from scale to efficiency. Jiansheng's semi-annual report provides a valuable sample for the industry. Whether upstream suppliers or downstream brands, all must re-examine profit distribution logic—in an era of low growth, those who mine internal efficiency will hold pricing power.