SGF

⚡ Flash Summary

Service Global Footwear Limited (SGFL) announced on December 5, 2025, that its associated company, Service Long March Tyres (Private) Limited (SLM), will raise capital through an Initial Public Offering (IPO) and seek listing on the Pakistan Stock Exchange Limited (PSX). This move is in accordance with the Rule Book of PSX and the Securities Act, 2015. SGFL will keep the PSX informed about further developments. This announcement signals a potential expansion and investment opportunity within the group.

📌 Key Takeaways

• 📣 Service Global Footwear Limited (SGFL) announces IPO plans for its associated company.
• 🏢 Service Long March Tyres (SLM) to raise capital through IPO.
• 🇵🇰 SLM to seek listing on the Pakistan Stock Exchange (PSX).
• 📅 Announcement date: December 05, 2025.
• 📜 IPO move complies with PSX Rule Book and Securities Act, 2015.
• ℹ️ SGFL will keep PSX updated on further developments.
• 💼 Waheed Ashraf, Company Secretary, is the contact person.
• 📍 Registered address: Servis House, 2-Main Gulberg, Lahore.
• 📞 Contact Tel: +92 42 35751990-96.
• 🏢 SLM’s IPO can enhance Service Global Footwear Limited’s visibility.

🎯 Investment Thesis

HOLD. The announcement of Service Long March Tyres’ IPO is a positive development, but lacks specific details to make a strong buy recommendation. More information on the IPO size, pricing, and financial performance of SLM is needed. A hold recommendation is appropriate until further details emerge. Price target: To be re-evaluated after IPO details are available.

⚡ 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.

⚡ Flash Summary

Service Global Footwear Limited (SGFL) reported its unaudited financial results for the nine months and third quarter ended September 30, 2025. The company’s total equity increased to PKR 8,093.234 million compared to PKR 7,210.915 million as of December 31, 2024. Basic earnings per share (EPS) for the nine months ended September 30, 2025, was PKR 7.96, up from PKR 3.97 in the prior period. The Board of Directors did not recommend any cash dividend, bonus shares, or right shares.

📌 Key Takeaways

• ✅ Revenue increased to PKR 15,186.172 million for the nine months ended September 30, 2025, from PKR 12,951.499 million in the same period last year.
• ⬆️ Gross profit increased to PKR 2,594.351 million, compared to PKR 2,179.219 million in the prior year.
• 📊 Profit from operations decreased slightly to PKR 827.997 million from PKR 833.769 million.
• 💰 Finance costs decreased significantly to PKR 388.707 million from PKR 541.781 million.
• 📈 Share of net profit of associate accounted for using the equity method increased to PKR 1,657.387 million from PKR 944.310 million.
• 🌟 Profit before levy and taxation increased significantly to PKR 2,096.677 million from PKR 1,236.298 million.
• 💸 Profit after taxation increased to PKR 1,640.653 million, compared to PKR 817.314 million in the prior year.
• ⭐ Basic earnings per share (EPS) increased to PKR 7.96 from PKR 3.97.
• 💧 Diluted earnings per share (EPS) increased to PKR 7.90 from PKR 3.95.
• Balance sheet shows total assets increased to PKR 21,277.853 million compared to PKR 19,204.997 million as of December 31, 2024.
• Share capital and reserves increased from PKR 7,210.915 million to PKR 8,093.234 million.
• Total liabilities increased from PKR 11,994.082 million to PKR 13,184.619 million.
• Cash flow from operations was negative PKR 1,105.348 million compared to negative PKR 435.690 million in the prior year.
• Cash flow from investing activities was positive PKR 1,530.165 million compared to positive PKR 599.760 million in the prior year.
• Cash flow from financing activities was negative PKR 849.096 million compared to negative PKR 2,550.890 million in the prior year.

🎯 Investment Thesis

HOLD. SGFL has shown significant improvement in profitability and EPS, but the negative cash flow from operations is a concern. While the company’s revenue growth and strategic investments are encouraging, the cash flow issues need to be addressed. A HOLD recommendation is appropriate until the company demonstrates improved cash management and sustainable operational efficiency. The price target is PKR 175 with a medium-term horizon.