Zungui Haixi gets off to a good start as a listed retailer
Chinese based sportswear and footwear manufacturer Zungui Haixi (TSX-V: ZUN) reported its maiden interim results since listing on the Toronto Venture Exchange for the six months ended December 31, 2009 (H1 2010).
Revenues for the first six of the company's fiscal year rose 26% to CDN$80 million, while gross margins edged slightly lower to 26.6% (H1 2009: 26.7%). Net income rose 28% to $13.2 million, while diluted earnings per share (EPS) rose 24% to 26 cents (H1 2009: 21 cents). Zungui Haixi noted that its first half fiscal results where even more robust when reported in Chinese Renminbi.
"The results for the quarter indicate strong revenue and net income growth in Chinese Renminbi ("RMB") of 22% and 20%, respectively. In Canadian dollars revenue increased 9% and net income increased 5% for the quarter," Jixu Cai, Chief Executive Officer of Zungui said. "The gross margin was reduced by 0.7% and 0.1% for the second quarter and six months year to date, respectively, due to an increase in the outsourced production of our athletic footwear. The expansion of the Company's production capacity will lower the need for outsourced production as our current facility is operating at full capacity. We expect to have our additional capacity functioning by March, 2011 after the construction of the facility and the installation and testing of the new production lines is completed."
Zungui Haixi listed on the TSX-V on December 21 2009 after a IPO fund raising of nearly CDN$40 million. The company is aiming to open 350 retail stores in 2010. Zungui Haixi distributes its products to consumers throughout China through an extensive network of retail outlets which exclusively carry ZUNGUI branded products.
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