I
annual report 2014
14
Statement from the Managing Director/CEO (Cont’d)
Revenue from sports shoes for the current financial year has remained relatively consistent with prior year, with revenue
from ‘XiDeLang’ brand sports shoes stood at RMB219.2 million (2013: RMB221.8 million) while revenue from OEM orders
of sports shoes stood at RMB137.5 million (2013: RMB149.4 million), decreased slightly by approximately 1.2% and 8.0%
respectively. The slight moderation was primarily due to the intensifying market competition and the economic uncertainties,
resulting in lower volume sold during the financial year.
Revenue from ‘XiDeLang’ brand sports apparels and accessories for the current financial year experienced a 37% slowdown,
stood at RMB173.4 million (2013: RMB275.0 million). This was primarily volume-driven, where the total units sold for the
current financial year had decreased from approximately 4.0 million pieces in the preceding financial year to 3.2 million
pieces, impacted by the active penetration and rapid expansion of the international fast-fashion brands.
Despite the challenging market condition and operating environment, our Group has managed to garner stable demand
for our own-branding products as well as OEM orders during the financial year. This is primarily attributable to our value-
for-money product designs, good product quality as well as enhanced production flexibility and efficiency arising from
our increased production capacity.
Profitability
Gross profit for the current financial year remained commendable, stood at approximately RMB130.8 million (2013: RMB171.7
million) representing a decrease of 23.8% in line with the moderation of sales performance. Gross profit margin stood at
24.7%, slightly lower as compared to 26.6% in the preceding year. The decrease in gross profit margin was primarily due
to lower revenue contribution from ‘XiDeLang’ brand sports apparels and accessories which generally command a higher
margin as compared to sports shoes.
Net profit for the current financial year, on the other hand, stood at approximately RMB49.6 million (2013: RMB103.6 million)
representing a decrease of 52.1%. Net profit margin stood at 9.4%, lower as compared to 16.0% in the preceding year.
The lower net profit and net profit margin was primarily due to higher advertising costs incurred in the current financial year,
necessary to sustain the market exposure and recognition of ‘XiDeLang’ brand to ensure our Group is in good position to
tap any future growth in demand when the market regains its growth momentum.
APPRECIATION
No doubt year 2014 has been a challenging year but our Group has managed to achieve a commendable performance.
The Board would attribute this to the dedicated efforts, hard works and commitments by our management team and staff.
On behalf of the Board, I wish to express my utmost gratitude to our treasured management team and workforce.
Taking the opportunity, I would also like to express my sincere appreciation to all our other stakeholders, including our
valued consumers and distributors, business associates and suppliers, bankers and regulators for their unwavering support
to XiDeLang all these years.
Not to be forgotten, my deepest gratitude to all our shareholders for your continued support and confidence in XiDeLang.
Your trust is our primary driving force to achieve future excellence!
Ding PengPeng
Managing Director/ Chief Executive Officer
