XinQuan ... Sep10

XINGQUAN FYE JUN 2010 PBT UP 30% YOY DENIES TALKS WITH NEW SUBSTANTIAL SHAREHOLDER

Outdoor wear maker, XINGQUAN INTERNATIONAL SPORTS HOLDINGS ltd posted a higher PBT of RM130.18m for FYE Jun 2010, compared with RM102.93m in FY09. Revenue rose 51% to RM609.26m.

The Annual Growth Rate for its Net Profit was 46% from FY06 to FY10. Its shoe business contributed 56% to its FYE Jun 2010 Gross Profit, followed by apparels and accessories (27%) and shoe soles (17%).

The Company denied that it is in talks with parties on taking up a substantial stake in the Company, said EC & CEO, WU QINGQUAN. " .... We are always in touch with different investors either from private or government sectors to update the performance of our Company and it is a part of our investor relations programme. However, we are not looking for strategic investors for significant stakes now ....", he told the Press on Aug 23, 2010.

wu said that he and his family, who together hold about 58.5% stake in XINGQUAN, were not keen to dispose of their shareholdings at the moment, adding that the Company was not looking for Rights Issues or Placement Exercises to facilitate the entry of a new shareholder.

EXPANSION
XINGQUAN said that it had expanded into four new provinces and autonomous regions recently and it will expand to Guizhou in 2010. It targets to have about 2,300 stores by FYE Jun 2011 from about 2,003 stores currently.

OUTLOOK
On the Company's earnings prospects for FYE Jun 2011, WU said it was aiming for double-digit growth for its top and bottom line, driven by increased capacity and demand for its products.

" .... We have the fast-mover advantage for the outdoor casual wear industry. As far as we aware, there are only two China brand listed companies for this segment, namely XINGQUAN and TOREAD, which is listed on SHENZHEN STOCK EXCHANGE ...." he said.

WU said that the slowdown in the China economy would not affect consumer spending significantly, adding that the market potential for its product segment in China was about 300m consumers.

CASH POSITION
On its Net Cash of Yuan 587m, WU said the Company would spend most of it on expansion. " .... We will spend Yuan 180m to pay off the remaining cost for our new factory (in Hui'an, Fujian), Yuan 40m on shoe sole machinery, Yuan 100m for distribution expenses, Yuan 100m for the makeover of point of sales, Yuan 80m for purchase of building and land use rights for the existing factory ...." he said.