Bosideng reports revenue rise of 1.4 percent in H1

REPORT_ Bosideng International Holdings, the down apparel company from mainland China in its unaudited interim results for the six months ended September 30, 2014 said that the group’s revenue increased by 1.4 percent year-on-year to about 2,849.5 million Chinese Yuan (463.4 million dollars). The company has attributed the rise in revenue to a 54.8 percent increase in revenue from the OEM management business, as a majority of orders in the 2014/15 financial year were completed and delivered by the end of September.

Commenting on the interim results, Gao Dekang, Chairman of Bosideng, said, “China’s apparel industry continued to face challenges, such as over-capacity, inventory backlog and excessive expansion of retail networks in the past. The apparel enterprises, however, had been generally well aware of the problems and already proactively adjusted their businesses in response. In addition, the apparel industry continued to put efforts to explore sales channels apart from the traditional ones. For instance, it is promoting the interaction between online and offline channels to adapt to new mode of consumption. Bosideng will strive to stay up to date on the market trends and thus enhance the competitiveness to maintain a sustainable and healthy growth for the long term.”

Since the group focused on clearing the inventory in the down apparel business, as well as on re-positioning the brand and adjusting the retail network; the revenue of down apparel business recorded a decline year on year. During the period under review, the revenue of down apparel business, OEM management business and non-down apparel business were approximately 1,418.4 million Chinese Yuan (230.7 million dollars), 1,011.2 million Chinese Yuan (164.4 million dollars) and 419.9 million Chinese Yuan (68.3 million dollars) respectively, accounting for 49.8 percent, 35.5 percent and 14.7 percent of the group’s revenue.

During the Period, the gross profit margin decreased by 2 percentage points year on year to 47.4 percent. This is attributable to the 5.2 percentage points decline in non-down apparel gross profit margin due to the reduction of Bosideng menswear inventory through the various promotion platforms, and the 2.9 percentage points decline in gross profit margin of OEM management business due to the change of order structure. The gross profit margin of down apparel increased by 9.1 percentage points year on year, which was mainly attributable to the increase in the proportion of Bosideng branded apparel sales with higher gross profit margin and the reversal of provision for price-loss of inventory.

Meanwhile, EBITDA increased by 11.9 percent year-on-year however operating profit decreased by 10.7 percent. Operating profit margin for the period was 10.8 percent, representing a decrease of 1.4 percentage points as compared to 12.2 percent for the corresponding period of last year. The Board has recommended the payment of an interim dividend of 1.2 cents in Hong Kong dollars per ordinary share for the six months ended September 30, 2014.

Looking forward, Liang Sheuh-Hvei, Chief Executive Officer of Bosideng said, “The group will remain prudent when developing the market in view of weak consumption, uncertain weather conditions and intensifying competition. The group will continue to strive to enhance its competitiveness in order to lay the foundations in the second half of the financial year for its long-term development.”

The group will also leverage on the Internet to further promote O2O and further expand the operation of its overseas flagship stores and its own down apparel brands and fully consolidate the group’s resources to enhance Bosideng’s status and competitiveness in the global down apparel market.