China Dongxiang Announces Interim Results of 2016 Net Operating Profits Recorded a Significant Growth of over 60%
(17 August 2016, 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, together with its subsidiaries, "the Group") is pleased to announce its interim results for the six months ended 30 June 2016 (“reporting period”).
During the reporting period, by enhancing our management capabilities, clarifying our brand positioning and optimizing the product-mix in e-commerce sales channel, the Group reported a stable growth in results. As our business profile comprising principal sportswear operations and supplementary investment operations continues to mature, this dual business model continued to bring desirable return to the Group.
During the reporting period, the Group achieved a growth of 8.9% in revenue to RMB650 million. China segment revenue increased by 6.8% yoy to RMB506 million, while operating profit grew by 42.6% to RMB552 million. Profit for the period attributable to equity holders increased by 65.2% to RMB479 million. Basic earnings per share increased by 65.0% yoy to RMB8.68 cents. To reward shareholders for their support, the Board of Directors has proposed to distribute 30% and 30% of the Group’s net profit attributable to equity holders for the six months ended 30 June 2016 as an interim dividend and interim special dividend respectively, representing a total dividends payout ratio of 60%.
To mark the centenary of the Kappa brand, the Group invited Asian pop and fashion superstar G-Dragon to become the new ambassador of Kappa during the first half of 2016, launching massive promotional campaigns in connection with this appointment which resulted in significant enhancement in our brand exposure and recognition. Meanwhile, the Group made dedicated efforts in detailed channel development. As at the end of June 2016, the Group had a total of 1,282 Kappa stores, representing a net increase of 15 stores compared to the end of last year. These included 419 self-owned retail stores run by subsidiaries. Besides, our Kappa Kids business recorded a revenue of RMB33 million for the first half of the year in steady commencement, accounting for 6.5% of our revenue from China. As at the end June 2016, it is worth mentioning that our e-commerce revenue in the first half of the year increased by 88.7% yoy, with a strong gross profit margin of 60%.
Looking forward, Mr. Chen Yihong, Chairman, Chief Executive Officer and Executive Director of China Dongxiang (Group) Co., Ltd., said, “In view of the new challenges and opportunities ahead, the Group will also be engaged in an ongoing effort to develop new businesses and bring innovative approaches into practice on the back of judicious market analysis. We will continue stand at the forefront of the market to ride with the tide of development, and against increasing market competition. With the characteristic fighting spirit of the people of Dongxiang, we will continue to venture forward and seek profitable return for our shareholders.
About China Dongxiang (Group) Co., Ltd.
Chan Dongxiang (Group) Co., Ltd. (HKEx: 3818) is a leading international sportswear brand enterprise in China which has been listed on the Main Board of the Hong Kong Stock Exchange since 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 brand in China, Macau and Japan. On 1 May 2008, China Dongxiang completed the acquisition of Phenix, a Japanese sportswear enterprise. Phenix is the most popular ski brand in Japan with the largest market share, as well as a well-known brand in the international market.
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