PEAK XTEP First Half 2012 Earnings Report

At noon on August 21st,

Sports (01968.HK) released its first half of 2012 earnings.

As an exclusive official market partner of NBA in China, PEAK has long been known. However, for the current data, the company has not gained fame and fortune, and its outstanding marketing performance has declined.

It shows that the company turnover decreased by 28.5% to 1 billion 610 million yuan over the same period, and net profit attributable to shareholders of the company decreased by 43.3% to 240 million yuan; the basic earnings per share were 11.42 points.

Corresponding to the decline in performance is the decline in gross margin, compared with the same period last year dropped 2.2 percentage points to 37.7%.

And the Maori decreased by 32.3% to 610 million yuan.

The company said that the decrease in corporate business during the period was mainly due to the whole first half of 2012.

The negative impact of inventory adjustment and its weak economic conditions on the demand for sporting goods.

Moreover, since 2012, the company has reduced the wholesale discount offered to distributors, but the increase in rebate and sales costs offset footwear and

The rise in prices of single products led to a decline in gross margin in the first half of 2012.

In the second quarter of 2012, the sales volume of the same store decreased by 18.5% over the same period last year.

By the end of June, the number of retail outlets in China was 7059, down 747 from the end of last year.

According to the company's retail network optimization plan, by the end of 2012, the number of retail outlets will be reduced to 6500.

And the average retail business per unit area is 2300 yuan, down 34.3% from the same period last year.

Although the company reduced the number of retail outlets and digested inventory, as of the end of June, the company's inventories increased by 25.56% to 529 million yuan over the end of the year.

And the average turnover days of the company increased from 49 days to 86 days at the end of last year. The company said that the main reason was that the company's capacity was abundant due to the decrease in market demand in the first half of 2012. The company finished the production orders for autumn goods earlier than the end of June.

As the company allows distributors to pay for a long time, the average number of accounts receivable and receivable turnover days increased from 66 days to 121 days at the end of last year.

At the same time, the cash flow of the company's business activities also declined, down 12.97% to 11 billion 340 million yuan compared with the same period.

Although the company has repeatedly promoted the internationalization of products, in the first half of the year, the overseas market was 196 million yuan, accounting for 12.2% of the total turnover, representing a 1.9 percentage point increase over the same period last year, but the turnover dropped by 15.8% over the same period last year.

At the same time, PEAK sports announced the 2013 off-site ordering meeting held in July.

The total order volume of this order will be equal to that of 2012. The amount of footwear orders is growing at a low single digit figure, and clothing will decrease as a single digit. The average wholesale price of footwear and clothing will increase by one digit.

Ceng Yanling, a researcher at the third financial Hong Kong stock exchange, once said that from the perspective of brand promotion, PEAK sports strategy has been regarded as a success.

However, from the data that has been disclosed, PEAK sports is likely to lose about 40% of its performance this year.

Liang Yuan, director of Research Department of Hang Ming securities (Hongkong) believes that PEAK sports has a short-term demand for technical callbacks, but believes there is little chance of a new low.

At present, the valuation is reasonable, and the stock price has reflected the unfavorable factors before.

The main risk of investment is that if the industry continues to fall into a trough and sales can not be reversed, it may again crack down on investor confidence.

Wind data showed that as of August 20th, PEAK sports's stock price fell 49.25% this year, closing at HK $1.34.

On the 21 day, PEAK sports rose 5.22% at noon and reported HK $1.41.

On August 21st, XTEP disclosed in its interim report that the gross profit margin was unchanged from 40.9% in the same period last year, with a dividend payout ratio of 50.3%.

Footwear business revenue increased 13% to 1 billion 189 million yuan (the same below), accounting for 46% of the revenue; clothing business revenue fell 0.5% to 1 billion 350 million yuan, accounting for 52.2%; accessories revenue increased 8% to 45 million 800 thousand yuan, accounting for 1.8%.

By the end of June, the number of XTEP retail outlets increased to 7603, compared with 7438 in the same period last year.

During the period, the average turnover days of trade receivables and bills increased from 58 days in the first half of last year to 74 days in the same period this year, while the average turnover days of trade payables and bills decreased from 73 days to 60 days.

Net cash and bank balances were 2 billion 510 million yuan, up 19.6% from the bottom.

The gearing ratio also increased from 12.6% at the end of last year to 18.7% this year.