⚡ Flash Summary

Service Global Footwear Limited (SGFL) held a corporate briefing session to discuss the annual audited accounts for the year ended December 31, 2024, and interim accounts for the period ended September 30, 2025. The company highlighted its commitment to sustainable growth and expansion into new markets, particularly the U.S. and EU. SGFL is focused on cost optimization, productivity enhancement, and leveraging its China office and mold development workshop to improve responsiveness. The company anticipates a challenging yet pivotal year in 2026 due to global demand softness and intense pricing competition.

📌 Key Takeaways

• 🏭 SGFL’s Muridke plant became operational in 1988.
• 💼 Demerged from Service Industries Limited in 2019, becoming a separate entity.
• 📈 Listed on the Pakistan Stock Exchange in 2020.
• 🌍 Exporting to more than 20 countries.
• ☀️ First Solar powered shoe manufacturer in Asia.
• 📊 Production capacity reached 4.6 million pairs by 9M2025.
• 🤝 Has 18.91% Equity Investment in Service Long March Tyres (Pvt.) Ltd.
• 🏢 100% Investment in Dongguan Service Global Limited (Subsidiary in China).
• 🌱 Generates 2MW of solar power and plans to double this to 4MW by 2025.
• 🌍 Annual Revenue increased to PKR 17,392 Million in 2024 from PKR 15,062 Million in 2023.
• 📉 Gross Profit decreased to PKR 2,890 Million in 2024 from PKR 3,301 Million in 2023.
• 📈 Net Profit decreased to PKR 1,105 Million in 2024 from PKR 1,182 Million in 2023.
• 🌟 Share of Profit from SLM increased to PKR 1,323 Million in 2024 from PKR 474 Million in 2023.
• 💰 Earnings Per Share (EPS) decreased to PKR 5.37 in 2024 from PKR 5.75 in 2023.
• 📊 Nine Months Revenue increased to PKR 15,186 Million in 2025 from PKR 12,951 Million in 2024.

🎯 Investment Thesis

HOLD. While SGFL demonstrates strong revenue growth and a commitment to sustainability, the decrease in profitability and EPS in 2024 raises concerns. The company’s strategic initiatives, particularly the expansion into new markets and focus on cost optimization, are promising, but their impact remains to be seen. Given these factors, a HOLD recommendation is appropriate with a price target based on sector multiples and future earnings potential, contingent on successful execution of strategic initiatives over the medium term.