Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 30): XingQuan International Sports Holdings Ltd announced its worst ever quarterly net loss since its listing on Bursa Malaysia in the fourth quarter ended June 30, 2016 (4QFY16), no thanks to reject shoes and weaker sales.

The Chinese-based shoe soles maker posted a net loss of RM386.52 million or 103 sen per share for 4QFY16, compared with a net profit of RM7.69 million or four sen per share in the previous corresponding quarter.

In its quarterly result announcement to Bursa Malaysia, XingQuan said the company recorded a loss of 415.7 million yuan (RM252.06 million), because the custom-made shoes that were delivered to customers in April, were found falling short of specifications.

"Due to the nature of the custom made shoes, it has limited reselling market, because of its specifications and functionality. The custom made shoes were sold at clearance price for total of 43.2 million yuan (RM26.19 million)," XingQuan added.

It also recognised a 157.5 million yuan (RM95.50 million) of doubtful debt.

Its quarter revenue halved to RM82.76 million, from RM166.21 million, due to contraction of sales volume in shoe soles, apparels and accessories.

No dividend was declared for the financial quarter under review.

For the full year (FY16), XingQuan posted a net loss of RM353.19 million or 93 sen, compared with a net profit of RM130.98 million or 47 sen a year earlier (FY15). It attributed the net loss to the poor sales, and a whopping loss of 573.5 million yuan (RM347.5 million) recorded by custom made shoes and provision for doubtful debt.

Annual revenue declined 47% at RM437.67 million, from RM824.71 million in FY15, as shoe soles sales volume shrank to 8.2 million pairs in FY16, from 15.1 million pairs in FY15, while apparels' sales volume fell to 2.2 million pieces, from 3.4 million pieces.

Going forward, XingQuan said economic uncertainties in China will have an adverse impact to its business.

"In addition, the change of consumer shopping behavior and stiff competition from e-commerce players, have also negatively affected our performance," it added.

Shares in XingQuan went up 0.5 sen at 16 sen today, for a market value of RM91.7 million.

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