Quarterly Report For The Financial Period Ended 30 September 2018

Financials Archive

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Condensed Consolidated Statement Of Comprehensive Income (Unaudited)

Income Statements

Condensed Consolidated Statement Of Financial Position (Unaudited)

Financial Position

Analysis of Performance

Analysis Of Performance


Our Group recorded total revenue of approximately RMB120.26 million and RMB338.42 million respectively during the current quarter and financial period under review, decreased by 17.1% and 19.1% respectively as compared to preceding year corresponding quarter and period.

The moderation in sales performance during the current quarter and financial period under review was primarily due to softer demand for own-branding sports shoes, with lower sales volume as illustrated below:

Own-Branding Division

Analysis Of Performance

The moderation was, however, partially mitigated by the increase in sales volume from the ODM Production Division, as illustrated below:

ODM Production Division

Analysis Of Performance


Our Group’s gross profit stood at RMB24.2 million and RMB62.5 million respectively for the current quarter and financial period under review, lower by approximately 6.1% and 13.2% as compared to the preceding year corresponding quarter and period; in line with the moderation of sales performance.

Notwithstanding the decrease in sales and gross profit, our Group’s profit after tax for the current quarter and financial period under review rose to RMB6.0 million and RMB16.3 million respectively; mainly attributable to the active monitoring of costs by our Group. In particular, our Group has realigned the marketing strategy and revised downward the advertisement costs in view of the uncertainties within the operating environment, which has resulted in cost-saving of approximately RMB6.0 million and RMB17.7 million for the current quarter and financial period under review.

This was, however, partially offset by the one-off employees’ benefit expenses of RMB2.04 million charged to profit or loss in respect of ESOS granted to eligible employees of the Group during the current quarter and financial period under review.

Outlook and Prospects

Our Group is cautiously optimistic that the prospects for the sportswear industry remain promising, although the industry outlook for the near term is anticipated to experience certain degree of volatility.

Demands for sportswear within the domestic China market and the global markets are expected to be gradual growth momentum, backed by the following catalysts:

  1. Active measures and initiatives by the China Government to promote the development of the domestic sports industry and boost domestic consumption. These measures and initiatives are expected to contribute positively to the sports industry growth in the medium and long term;

  2. Huge and rising population within China, particularly with the implementation of two-child policy;

  3. Rising disposable income per capita for China citizen; and

  4. Increasing awareness on healthy lifestyle and growing popularity of sports

Barring any unforeseen circumstances, our Group expects the financial performance for the financial year ending 31 December 2018 to remain positive.