动向

China Dongxiang (Group) Co., Ltd. Announces Interim Results for the Six Months Ended 30 June 2014

2014年08月21日

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(21 August 2014, Hong Kong) - The leading international sportswear brand enterprise in the PRC, China Dongxiang (Group) Co., Ltd. ("China Dongxiang" or "the Group"; HKEx stock code: 3818) announced its interim results for the six months ended 30 June 2014.

In retrospect of the first six months of 2014, the global economy was recovering, though at a slackened pace, while the PRC economy saw growth in stable development. For the 6 months ended 30 June 2014, the reported revenue of the Group was RMB465 million, representing a 17.4% year-on-year decrease, while net profit attributable to equity holders increased by 4.3% to RMB96 million. Basic earnings per share improved 4.8%, year-on-year, to RMB1.75 cents. As at 30 June 2014, cash and bank balance and treasury products amounted to RMB4,649 million. In view of the sound financial position of the Group, the Board of Directors has proposed to distribute 30% of the net profit attributable to equity holders for the 6 months ended 30 June 2014 as interim dividend, and has further proposed to distribute 40% of the net profit attributable to equity holders for the 6 months ended 30 June 2014 as special dividend to reward shareholders. As such, the total interim dividend payout ratio for the 6 months ended 30 June 2014 is 70%.

Mr. Chen Yihong, Chairman, Chief Executive Officer and Executive Director of China Dongxiang, commented, "Notwithstanding the twists and turns in market trends, China Dongxiang continued to drive the channel combination model of "self-owned retail outlets + dealership + franchise chain" with steadfast determination, unwavering confidence and prudently planned actions. While optimizing our existing network of dealers, we also made strong efforts to develop owned branch companies and vigorously promoted the franchise chain system. Thanks to the appropriate allocation, scientific control and effective operation of sales channels, we reported year-on-year improvements in overall same-store performance, while also securing more favourable discount rates. It is noteworthy that all stores under the "self-owned retail store" and "franchise chain" models reported positive year-on-year growth in same-store performance."

During the period, the Group continued to optimize its sales network and store efficiency, assessed its store network and made adjustments accordingly. As at 30 June 2014, the Group had a total of 1,084 Kappa retail stores operated directly or indirectly under the China segment. The distribution network of retail stores covered all major provincial capital cities and other major cities and townships in China. In the first half of 2014, the number of retail stores directly or indirectly operated by 7 self-owned subsidiaries of the Group increased to 301, and the franchise stores were expanded to 28 stores. As such, the Group has further developed the coverage of its self-owned retail network, consolidating its self-operating business and generating revenue to the Group.

With rapid development of e-commerce, it is not merely regarded as a conventional channel for stock clearance. The base of consumer buying decision has progressively shifted to product orientation from price orientation. As a result of effective stock clearance by the Group over the past few years, we have increased the percentage of new products supply for on-line sale, and launched new products only for on-line sale, providing more choices for consumers. In the meantime, further expansion of self-owned e-commerce has allowed us to respond promptly at the retail end, addressing market needs and exhibiting products to consumers effectively in a timely manner. The Group has also paid close attention to the growth in emerging industries and consumer goods sectors, and cautiously participated in the emerging growth. Leveraging our vision and comprehensive understanding, we gain competitive advantages and considerable financial revenue.

In terms of brand promotion, The Kappa brand of the group have been engaged in consistent efforts to enhance the brand image of Kappa in line with our overall business development, as we continued to leverage our strengths and experience in sports and entertainment marketing. During the first half of 2014, a promotional activity entitled "Kappa Back to Back Once Again" was held, during which celebrities were invited to play interactive games with young spectators using offline props on a uniquely crafted Kappa chair placed at selected spot in the Beijing CBD, in a figurative expression of the theme of "Being Together with Kappa Once Again." The innovative "Bubble Soccer Match" became an instant market sensation upon its launch in Beijing during the World Cup Month, with close to 3,000 people joining in the game. Typically fun and creative and innovative, these activities have attracted a lot of attention from consumers and the media. In addition to close cooperation with traditional media, the brand was also increasing its investment in the addition of new media to enhance in-depth interaction with target groups through Internet platforms such as Weibo and Wechat.

The Group has also initiated the back-up material mechanism in the supply chain system and succeeded in shortening the lead-time for meeting additional orders for current-season products. Meanwhile, the Group substantially increased the proportion of Japanese orders developed in China through rational and organic adjustment and control, completing another successful attempt at integrating our operations in China and Japan.

Looking into the second half, The Group will continue to optimize inventory through a bunch of comprehensive channels, enhance the efficiency of its logistics and distribution, optimize supply chain, increase quick response to market feedbacks, maintain the business model of "self-operated stores + dealership +franchise chain" and accelerate the construction of a steady and highly-efficient channel network. In addition, we will address market demands, facilitate development of e-commerce channel and foster maturity in e-commerce business. The group will explore a new way for reform and innovation, introducing reforms and changes to fulfill consumer's fresh desires and new attitude for personality and variety. We will remain committed to its product philosophy of "sports, fashion, sexiness and style" and adjust direction of product development decidedly for consolidating our brand image.

Mr. Chen concluded, "No matter how difficult reform is and how long it takes, China Dongxiang will remain confident to in achieving it. Our determination and aggressiveness will support us to get through a difficult way of reforms and changes, leaving us tremendously fruitful return. Persistence in our beliefs for making more room and opportunity for development will assure maximum return for our shareholders and consumers."

 

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About China Dongxiang (Group) Co. Ltd.
China Dongxiang (Group) Co., Ltd. (HKEx: 3818) is a leading international sportswear brand enterprise in China and was successfully listed on the Main Board of the Hong Kong Stock Exchange on 10 October 2007. The Group is primarily engaged in the design, development, marketing and wholesale of branded sportswear in China. Currently, China Dongxiang owns all rights to the internationally renowned Kappa and Robe Di Kappa (RDK) brands in China, Macau and Japan. Its products convey an active, fashionable and youthful image that are welcomed warmly by China's fast growing and high potential consumers. The Group completed the acquisition of a Japanese sportswear enterprise, Phenix, on 1 May 2008. Phenix is the most popular ski brand in Japan with the largest market share, which has gained strong recognition in the international market.