You may not have heard of Best Pacific International. But its materials help make the clothes many of us wear.
At just HK$3.3 billion market cap, Best Pacific International manufactures apparels for Nike, Nike, Uniqlo, and Victoria’s Secret.
And it has built remarkable resilience against trade war pressures through smart geographical diversification.
In fact, at its current 9% dividend yield, this is one of Hong Kong’s most underappreciated dividend stories, while quietly dominating global lingerie and sportswear materials markets.
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Best Pacific: A quiet dividend payer powering big sports and lingerie brands
Best Pacific International is the specialist of clothing, making elastic fabrics, elastic webbing, and lace – the invisible backbone of the global apparel industry.
- Elastic fabric for sportswear and apparel (53% of revenue for 1H2025)
- Elastic fabric for lingerie (25% of revenue for 1H2025)
- Elastic webbing (22% of revenue for 1H2025)
Today, the company serves 3 main segments:
This mix is important. The sportswear and lingerie demand do not always move together. When one slows, the other can hold up demand. Serving both gives Best Pacific a more stable base.
In lingerie, the company partners with prestigious brands including Victoria’s Secret, Triumph, Wacoal, Aimer, and Marks & Spencer.
For sportswear, the company supplies materials to industry giants like Nike, Adidas, Under Armour, Lululemon, and Uniqlo.
This diversified customer base across different segments provides stability and growth opportunities.
Here’s the other thing: The company’s production footprint strategically spans multiple countries.
Its main manufacturing hub remains in Dongguan, China, employing over 5,600 people across 215,000 square meters of facilities.
Like many of its peers, Best Pacific has actively expanded its global footprint with manufacturing facilities in Vietnam and Sri Lanka.
Before President Trump returned to the White House for his second term, concerns had already been rising over overreliance on China, prompting many apparel brands to favour suppliers with diversified production bases.
That’s the bad news.
The good news is, this trend contributed to Best Pacific’s robust sales growth in Vietnam (over 30%) and Sri Lanka (around 40%) during the first half of 2024.
However, after Trump’s inauguration, the administration imposed new tariffs on multiple countries – including Vietnam and Sri Lanka.
This temporarily weighed on Best Pacific’s performance in the first half of 2025.
Strong performance drives growth
Best Pacific’s financial trajectory tells a compelling growth story.
From 2020 to 2024, the company achieved an impressive compound annual growth rate: Its revenue grew 9.7% CAGR, gross profit grew 12.6% CAGR, and net income surged 23.9% CAGR.
This showed improving operational efficiency. In fact, Best Pacific’s revenue climbed from ~HK$3.5 billion in 2020 to HK$5.1 billion in 2024.
Its 2024 performance was exceptional, with revenues jumping 20.5% y/y, driven by robust demand from international sportswear brands and improved capacity utilization across overseas facilities.
Meanwhile, its gross profit margins grew from ~24% in 2020 to ~26% in 2024, reflecting manufacturing efficiencies and higher-value product mix.
And its net profit margins improved from 7.4% to 12% over the same period. This showed effective cost control and operational leverage.
What’s more, its return on equity jumped from ~9% in 2020 to ~17% in 2024, which reflected a high capital-efficiency.
Here’s the other thing: Best Pacific’s balance sheet remained healthy with its gearing ratio improving from 81% to 50%. It also showed a healthy interest coverage at least 8.6x.
Best Pacific’s high dividend payout
Best Pacific pays two dividends a year – an interim and a final. In recent years, the payout ratio has stayed ~50%.
That is a sensible level.
It shares profits with investors and still keeps cash for growth and working capital.
The yield today is ~9%. That is high. But remember: the amount paid can move up or down with earnings, inventory needs, and trade costs.
This is normal for the textile cycle. The key point is coverage. A ~50% payout leaves a cushion if a year turns soft.
Here’s what I’m concerned
The thing is, Best Pacific can be susceptible to geopolitics. For instance, investors worry about tariffs, export rules, and global supply chain shifts.
Next, apparel demand can follow consumer behaviour. If spending gets affected, orders can drop fast.
These risks are real.
Having said that, what’s worth watching is any changes in US trade policy can move the stock.
However, if Best Pacific keeps margins steady, manages its plants well, and shows it can pass through some costs, the market could re-rate the stock over time.
My final thoughts
At current 9% dividend yield, this is a quiet, under-the-radar business in a highly fragmented industry.
Best Pacific stands out selling the essential parts that make modern lingerie and sportswear.
Plenty of companies distribute 80% of their earnings, yet still don’t achieve this kind of yield.
In the broader context of the U.S.–China trade war, Best Pacific has made strategic moves to cushion against geopolitical risks.
As we approach the year’s end and speculation grows over another round of tensions between the U.S. and China, Best Pacific’s 9% yield looks tempting.
