China Xiniya's brand remains vibrant; generates solid results

17 Jun '11

6 min read

Mr. Qiming Xu, Chairman and Chief Executive Officer, commented, "We are pleased to report solid results for the start of 2011. Our sales momentum is continuing as we dedicated more resources to marketing and advertising to support the Xiniya brand. The promotional efforts of our spokesperson, Jacky Cheung, and our partial sponsorship of his 'Half Century' concert tour, coupled with our first national television campaign as a public company on two of China's leading national channels, helped to propel impressive results during the quarter. Xiniya's ongoing sales momentum was evidenced by the 29% sales increase at our most recent bi-annual sales fair held in April. Our brand remains vibrant and we expect to continue to deliver solid results for the rest of the year."

First Quarter 2011 Results

Revenue for the first quarter of 2011 was RMB159.3 million, compared with revenue of RMB122.4 million for the first quarter of 2010, which represented a 30.1% increase. Revenue was driven by volume growth of 9.2%, with the number of units sold increasing from 1.0 million in the first quarter of 2010 to 1.1 million in the first quarter 2011. ASP increased by 19.2% from RMB118.1 in the first quarter of 2010 to RMB140.8 in the first quarter of 2011, of which approximately 11% was attributable to a change in our product mix, and an increase in materials and labor costs (which was passed on to consumers in the form of higher prices) accounted for approximately 8%.

In the first quarter of 2011, Xiniya's authorized network of retailers added 42 new retail outlets, as compared to 35 new retail outlets added in the first quarter of 2010. In 2010, 39% of the new stores for the year were opened in the first half of the year, while 61% of the new stores were opened in the second half. The total store count as of March 31, 2011 was 1,445. The Company places significant emphasis on opening quality stores and maintaining sustainable store expansion rates.

Gross profit increased 35.0% to RMB53.6 million in the first quarter of 2011 from RMB39.7 million in the first quarter of 2010. Gross margin was 33.6% compared with 32.5% in the first quarter of 2010 – an increase of 1.1%. The ASP increase of 19.2% in the first quarter of 2011 helped to offset higher materials and labor costs.

Interest income was RMB1.9 million in the first quarter of 2011 as compared to RMB0.2 million in the first quarter of 2010.

Selling and distribution expenses in the first quarter of 2011 increased significantly due to an increase in advertising and promotional expenses. Advertising and promotional expenses were RMB7.2 million, or 4.5% of revenue in the first quarter of 2011, compared with RMB0.8 million, or 0.7% of revenue, in the first quarter of 2010. These higher expenses mainly related to the sponsorship agreement with the Company's spokesperson, Jacky Cheung, one of the leading pop stars in China, sponsorship of Jacky Cheung's concerts, and advertising on Chinese national television channels, CCTV5 and CCTV12.

Click here for more details

China Xiniya Fashion Limited

More Apparel/Garments News - China...