Stella International Holdings (1836.HK): 3Q26 sales beat on stronger ASP despite lower volume; FY26 guidance reiterated; Buy

Stella's 3Q26 group sales grew 2.2% yoy with OEM sales up 1.3% yoy, ahead of GSe of -1.8% yoy. OEM volume fell 4.3% yoy, mainly reflecting production front-loading for a casual customer into 1H26 ahead of the phased Philippines factory shutdown starting in July, while ASP rose 6.0% yoy on a higher-ASP Sports mix and a lower contribution from lower-priced Casual products; higher material costs on high-end products were fully passed through, leaving gross profit broadly unchanged and mechanically diluting margins. For reference, Yue Yuen and Feng Tay OEM revenue declined 2% each in 3Q26. At the briefing, management reiterated guidance of broadly flat 2026E volume, with the largest customer's decline offset by ramps from other customers, and said 1Q27 order intake and new factory POs remain on track. The largest customer's Vietnam factory runs at near-full utilization, the new Indonesia factory has a clear three-year premium product order plan, and China volumes are in line with the reduc