XiDeLang posts 4th consecutive net profit decline at RM3.78m, down 80% on-year

by **Cals** Tue 10 Feb 2015, 21:59

XiDeLang posts 4th consecutive net profit decline at RM3.78m, down 80% on-year

By Charlotte Chong / theedgemarkets.com | February 10, 2015 : 7:43 PM MYT
KUALA LUMPUR (Feb 10): China-based sports apparels manufacturer [size=14]XiDeLang Holdings Ltd ([You must be registered and logged in to see this image.] Financial Dashboard)'s net profit for its fourth quarter ended Dec 31, 2014 (4QFY14), slumped 80.1% to RM3.78 million from RM19 million in 2013, due to lower sales from its range of house-brand sports apparels and accessories.

This marks the fourth consecutive decline in its net profit since the group's first financial quarter ended March 31, 2014 (1QFY14), which was at RM7.37million, down 34.67% from 11.29million in 1QFY13. The decline in its bottomline has been in tandem with the decline in its topline.

Meanwhile, its 4QFY14 revenue was 32.88% lower at RM68.05 million from RM101.38 million in 4QFY13.

As a result of the weaker financials, its earnings per share for 4QFY14 dropped to 0.33 sen from 2.09 sen in 4QFY13.

In an announcement with Bursa Malaysia today, XiDeLang (fundamental score: 2.70; valuation score: 1.20) said it was also affected by global economic uncertainties, which impacted its revenue from original equipment manufacturer (OEM) orders during the 4QFY14 and the full FY14.

"The decline was volume-driven, with volume sold during the current quarter and financial year under review lowered to approximately 600,000 pairs (4QFY13: 700,000 pairs) and 2.3 million pairs (FY13: 2.9 million pairs) respectively," it said.

Still, regardless of intense competition globally and domestically, the group managed to garner stable OEM orders as a result of its enhanced production capability following the commencement of use of the group's new headquarter and production centre, it said.

As for its full year FY14, XiDeLang registered a net profit of RM28.21 million, half 2013's RM58.93 million. Revenue for FY14 dipped 18% to RM301.54 million from RM367.62 million.

"Although the growth of the China's sportswear industry in the near term may be moderated due to the economic uncertainties, the group is cautiously optimistic that consumer demand will remain healthy in the year ahead," it said on prospects.

It added that the group will be able to sustain an encouraging financial performance in FY15.

Its counter closed 4.35% lower at 11 sen today, translating to a market capitalisation of RM126.44 million.

(Note: [size=12][size=12]The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size][/size]
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