Xingquan wants to boost presence in China and enter Taiwan

  • Business
  • Tuesday, 02 Nov 2010

KUALA LUMPUR: Outdoor wear company Xingquan International Sports Holdings Ltd aims to have another 1,100 points of sale/outlets by mid-2013 to further boost its presence in China.

The company is also considering entering Taiwan in the next five years due to the similar culture in that market.

Xingquan executive chairman Wu Qingquan said the company, which had 2,003 points of sale as at June 30, hoped to add about 300 more by the financial year ending June 30, 2011 (FY11) with focus on five new provinces and autonomous regions, namely Shaanxi, Gansu, Qing Hai, Ningxia and Guizhou.

“We plan to set up another 800 points of sale in these and existing provinces in FY12 and FY13,” he told StarBiz.

He said the company would use RM44.55mil that was expected to be raised from the issuance of Taiwan Depositary Receipts (TDRs) to expand its sales and distribution network in FY12 and FY13.

Wu said the proceeds would be used as subsidies in the form of shop billboards, display shelves, lighting and interior decoration work purposes to the distributors for opening the points of sale and outlets.

“We are also allocating about RM26.51mil from the TDR proceeds for the makeover of our points of sale as part of our rebranding exercise.”

He said outdoor wear was expected to be popular among new affluent Chinese consumers with the increase in spending power in China due to the strong currency.

“As far as we are aware, Xingquan and Toread, listed on the Shenzhen Stock Exchange, are the only China brand-listed companies which focus on outdoor wear,” he said.

The company would continue to build its Addnice brand and work with its distributors to increase its marketing activities, he said.

According to the National Bureau of Statistics of China, the total retail sales of consumer goods in the first three quarters of this year had reached 11.1 billion renminbi (about RM5.2bil), a year-on-year rise of 18.3%.

On the company’s shareholding spread among institutional investors, Wu said the company had a combination of various types of investors, including government funds, private funds, foreign funds as well as high-network individuals.

Currently, its institutional funds include the Employees Provident Fund, Kumpulan Wang Persaraan, and two funds from Europe.

Xingquan, which is expected to announce its first-quarter financial results for FY11 in mid-November, posted a net profit of RM105.5mil with revenue of RM609.3mil for FY10.

For FY10, the shoe business contributed 48.9% of its revenue, followed by apparels and accessories (33.3%) and shoe soles (17.8%).

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