Pou Sheng International's first-half results reinforced a pattern of improving profitability without a return to sales growth, and investors responded by pushing the stock sharply higher in Hong Kong trading. Shares opened 3.1% higher on the 13th and climbed more than 9% intraday to HK$0.35, with turnover approaching HK$30 million, after the sportswear retailer reported revenue of 8.96 billion yuan for the six months ended June 30, 2026, down 2.1% year on year, while profit attributable to owners rose 29.9% to 244 million yuan. Gross profit slipped 0.9% to 3.04 billion yuan and basic earnings per share were 4.70 yuan cents. The board declared an interim dividend of HK$0.016 per share and a special dividend of HK$0.016, lifting the total payout 39.1% from a year earlier. The earnings improvement was driven by tighter discount discipline, better inventory aging management, lower operating expenses and restructuring benefits rather than a broad-based sales rebound. Inventory fell to 4.67 billion yuan at the end of June from 5.02 billion yuan at the end of 2025, the share of stock aged more than 12 months stayed below 9%, and the company reduced directly-managed stores by a net 200 to 3,110 in Greater China. Pou Sheng said direct-to-consumer channels outperformed franchise operations as it pushed an omnichannel model, YYsports Warehouse expansion and Douyin-linked inventory integration. The next test remains whether those initiatives can support revenue before Pou Sheng stops selling Nike products on mainland China online platforms from January 1, 2027, a business that accounted for about 15% of 2025 revenue. Parent Yue Yuen Industrial reported a much weaker first half, underscoring the gap between downstream retail resilience and continued pressure on upstream manufacturing.