China's Xidelang to raise RM58m from Bursa listing

By Chong Pooi KoonPublished: 2009/10/24

Sportswear maker Xidelang Holdings Ltd yesterday launched an initial public offering (IPO) that will raise RM58 million, set to be the third Chinese company to list here.



Investors are wary of Chinese IPOs after the poor performance of the first two listings on Bursa Malaysia.

Shares of shoemaker Xingquan International Sports Holdings Ltd have fallen 23 per cent since the company was listed in July, while those of Multi Sports Holdings Ltd, a maker of shoe soles, tanked 40 per cent since the firm's August listing.

Undeterred, Xidelang co-founder and managing director Ding Peng Peng vows to change the market's negative perception towards Chinese IPOs, after their generally disappointing performance in Malaysia and Singapore.

"We are aware of this and have considered it seriously. With the help of our bankers, we are confident that we won't let the market down," Ding said in Kuala Lumpur yesterday.



AmInvestment Bank Bhd and OSK Investment Bank Bhd are working on the share sales.

Xidelang, based in the southeast coastal province of Fujian in China, makes shoes, apparel, accessories and sporting equipment under the "Xidelang" brand.

It made a net profit of RM48.4 million on revenue of RM275.4 million last year.

Despite the global recession this year, its net profit jumped 89 per cent to RM38.2 million in the first six months to June 2009, while revenue soared 70 per cent to RM197 million.

Ding said Xidelang is set to ride on the growth of China's red-hot economy and the growing popularity for homegrown sportswear brand.

Part of the money raised will finance the construction of a new plant, which will double its annual capacity of 4.8 million pairs of sport shoes when the first phase is completed next year.

The second phase, when completed by mid-2011, will raise production of sports apparel by up to five million pieces a year.

Xidelang is selling 100 million shares in the IPO, of which 90 million will be privately placed out and the remaining 10 million for public application.

The share sale will close on October 30 and the company is slated to list on Bursa Malaysia on November 11.