Xingquan Q1 net profit rises on higher sales volume, selling prices

KUALA LUMPUR: China-based Xingquan International Sports Holdings Ltd posted a 25.36% rise in first-quarter net profit to RM35mil on higher sales volume and increased average selling prices of shoes and apparel.

Revenue rose 26.84% to RM213mil versus RM168mil in the first quarter.

Executive chairman and chief executive officer Wu Qingquan after the company's AGM that it expected 30% growth annually in outdoor casual-wear market for the next two years.

While some mainland China companies listed on Bursa Malaysia, such as Xidelang Holdings Ltd and Multi Sports Holdings Ltd, have declared dividends to enhance their attractiveness to investors, Wu said the company won't be paying dividends for the year ended June 30, 2011 owing to its expansion plans.

And Wu added it was uncertain if dividends would be paid for the current fiscal year to June 30, 2012.

“It will be the decision of the board of directors. They will also have to consider the cash-flow requirements and cash-flow position of the company,” Wu said.

Xingquan is one of six mainland China-based companies listed on Bursa. It was floated in June 2009 after an initial public offering (IPO) priced at RM1.71. Its share price has since gradually fallen and closed yesterday at 86 sen, almost halve its IPO price.

On the market outlook, Wu said: “We remain bullish on the industry outlook and will continue to embark on rapid expansion to capitalise on the growth in the People's Republic of China market.

Meanwhile, Ooi Guan Hoe and Tan Eng Choon have been appointed independent and non-executive directors, replacing Datuk Siow Kim Lun and Datuk Ng Ah Hock.