China Xiniya Fashion Limited ("Xiniya" or the "Company") (NYSE:XNY), a leading provider of men's business casual apparel in China, today reported financial results for fiscal year 2010. The financial statements and other financial information included in this press release are prepared in conformity with International Financial Reporting Standards (“IFRS”).
The Company publishes its financial statements in Renminbi (“RMB”). Unless otherwise noted, all translations from RMB to U.S. dollars were made at the rate as certified by the Federal Reserve Board of the United States as of December 30, 2010, which was RMB6.6000 to $1.00.
Fiscal Year 2010 Highlights
- Total revenue in 2010 increased by 33.8% year-over-year to RMB899.3 million ($136.3 million) - at the high-end of prior guidance of RMB880 million to RMB900 million.
- Gross profit margin was 34.5% in 2010 compared to 34.7% in 2009; a 21.6% increase in ASP helped to offset the increase in materials and labor costs.
- Net profit increased 29.8% year-over-year to RMB252.3 million compared with RMB194.3 million in 2009.
- Earnings per ADS increased by 27.1% year-over-year to $0.75 per ADS in 2010.
- Non-IFRS earnings per ADS (excluding share-based compensation expenses) increased by 28.8% year-over-year to $0.76 per ADS in 2010.
- Xiniya added 223 new retail outlets opened by its network of authorized retailers, which was higher than the original planned increase of 180-200 new outlets.
- Following a successful bi-annual sales fair held in September 2010, first quarter 2011 revenue in RMB is expected to increase by 29%-30% compared to the first quarter of 2010. Gross margin in the first quarter of 2011 is expected to range between 33%-34% versus 32.5% in the first quarter of 2010.
- Earnings per ADS are expected to be in the range of $0.08-$0.09 compared to $0.09 in the first quarter of 2010, due to the expiration of the Company’s preferential PRC tax treatment at the end of 2010. Xiniya’s tax rate will increase to 25% from 2011 onwards versus a rate of 12.6% in 2010.
- Revenue in RMB in the first half of 2011 is expected to increase by 27%-30% and gross margin is expected to be in the range of 32-33% compared with 31.9% in the first half of 2010.
- Xiniya plans to increase the number of retail outlets managed or authorized by its distributors by approximately 180 to 220 in 2011.
- Through February 2011, Xiniya’s network of authorized distributors added 28 new retail stores compared to 24 stores added in the first two months of 2010. As of March 28, 2011, a total of 41 new retail stores have been added, compared to 35 new stores added in the first three months of 2010. In 2010, 39% of our new stores for the year were opened in the first half of the year, while 61% of the new stores were opened in the second half.
Mr. Qiming Xu, Chairman and Chief Executive Officer, commented, “After our successful listing on the New York Stock Exchange last November, I am pleased to announce our strong operating performance for the year ended December 31, 2010. Our business casual assortment was well received in the marketplace and was the main driver behind our solid sales growth for the year. Going forward, we expect continued growth in the first half of 2011 and continued momentum during the year as we will be allocating more resources towards our marketing activities. We are strengthening our brand to position ourselves for long-term growth and become one of the leading menswear brands in China.”