Xtep net rises 27.4pc as it eyes overseas markets
Mainland sportswear producer Xtep International Holdings, which posted a 27.4 per cent increase in net profit to 647.5 million yuan (HK$736.46 million) last year, is set to tap into the East Asian and Middle East markets this year.
Shares of Xtep rose 6 HK cents, or 1.02 per cent, to close at HK$5.95 after the company reported turnover of 3.54 billion yuan, up 23.7 per cent from 2008. Net profit margin improved to 18.3 per cent from 17.7 per cent during the period.
The Fujian company ranked fourth in terms of both annual turnover and net profit, following rivals Li Ning, Anta Sports Products and China Dongxiang (Group).
Chief executive Ding Shuipo said the firm would expand the retail network for Xtep brand footwear and apparel into the Middle East and Southeast Asian markets this year.
It had also gained a licence to produce and distribute Disney Sports products in 21 countries in Southeast Asia, the Middle East and parts of Europe, he said.
As part of the company's international strategy, Ding said the overseas outlets would help Xtep understand foreign markets as part of its long-term expansion plan.
Expecting the sportswear market in China to see 15 per cent growth this year, Ding estimated the company's same-store sales would grow about 5 per cent for the period.
As of the end of 2009, the company operated 6,533 retail outlets through distributors and third-party retailers, a net increase of 1,047 from the previous year. They include 6,103 Xtep shops and 430 stores under the Disney Sports and Koling brands.
This year, it plans to add another 800 to 1,000 Xtep outlets and five to eight flagship stores mainly in second and third-tier cities on the mainland.
'The market in first-tier cities in China is dominated by international brands and it is starting to show a slowdown in purchasing power,' Ding said.
'By contrast, the income level in second and third-tier cities is rising significantly and more people living there have begun to adopt a sporty lifestyle,' he added.
The firm said yesterday it had appointed Tan Wee Seng, a former senior executive of Li Ning, as its non-executive director. Tan resigned as the chief financial officer and executive director of Li Ning in 2008 after working for them for five years.
Xtep proposed a final dividend of 10 HK cents with a special dividend of 5 HK cents per share.
