China's Xidelang expects RM100m from Bursa listing

By Zuraimi AbdullahPublished: 2009/08/14

The Jinjiang-based sports shoes and apparel maker will be the third foreign firm to be directly listed on Bursa Malaysia's Main Market

XIDELANG Holdings Ltd, a sports shoes and apparel maker from China, expects to raise about RM100 million from an initial public offering (IPO) in Malaysia next month to expand its business.

It will be the third foreign firm to be directly listed on Bursa Malaysia's Main Market. The Jinjiang-based company has hired AmInvestment Bank Bhd to arrange the IPO.

AmInvestment is also doing the IPO for Multi Sports Holdings Ltd, set to become the second company from China to float its shares here next week.

Xidelang produces and distributes sports shoes, apparels, accessories and other sporting equipment under its own "XiDeLang" brand.

"Our target segment is in the casual and leisure sportswear for those aged 15 to 35 years old," managing director and chief executive officer Ding PengPeng said at a briefing in Kuala Lumpur yesterday.

"Our listing is mainly to raise funds to support our continuous advertising and promotion campaigns to reach mass consumer markets in second- and third-tier cities in China where the disposable income are growing faster than the first-tier cities," he added.

The company has a decent track record.

Its compounded annual growth rate from 2006 to 2008 was at 70 per cent for revenue and 100 per cent for net profit, Ding claimed.

For the year ended December 31 2008, group net profit stood at 98.9 million renminbi (about RM47.4 million) over revenue of 573.9 million renminbi (RM275.4 million), up from about RM158.5 million previously.

Net profit margin rose from 16.4 per cent in 2007 to 17.2 per cent last year.

About 67 per cent of Xidelang's revenue came from sports shoes, while the balance was from sports apparels, accessories and other sporting equipment.

Ding thinks that contribution from the non-sports shoes business will rise to 40 per cent this year and higher in the later years.

Xidelang's products are distributed to some 2,320 retail locations in 24 provinces and municipalities in China.

The company produced 4.4 million pairs of shoes in 2008, but sold 6.1 million pairs during the year. It outsources some of its manufacturing needs to meet sales volume, Ding said.

Xidelang currently hires third-parties to supply all its apparels but plans to set up a new factory to do this itself by 2011.