Business

Saturday October 24, 2009

XiDeLang looks forward to good debut


KUALA LUMPUR: China-based sportswear maker XiDeLang Holdings Ltd is confident its shares will “get good price appreciation” on their debut listing on Bursa Malaysia main market next month, says managing director Ding PengPeng.

“We hope we won’t disappoint our shareholders,” he said when asked if XiDeLang was concerned about its share price performance as two Chinese companies floated on the local bourse earlier this year had seen lacklustre investor interest.

With extensive expansion plans under way, XiDeLang hoped to share a “profitable growth” with Malaysian investors and was confident it would be “promising long-term investment avenue,” he said after launching the company’s prospectus yesterday.

Based in Jinjiang, XiDeLang is engaged in brand management and marketing of XiDeLang sportswear including shoes, apparel, accessories and sporting equipment.

Plans to expand production capacity included building a new shoe manufacturing facility in Jinjiang City in the Fujian Province, Ding said.

“The first phase is scheduled to be completed by mid-2010 and we hope to double our production capacity from the current 4.8 million pairs of sports shoes to 10 million pairs when the facility is up and running,” he said.

He said XiDeLang also planned to build a new facility with total built-up area of 150,000 sq m for apparel manufacturing, targeted for completion by end-2012.

“We hope to produce five million pieces per annum,” he said, adding that the company’s range of sports shoes, apparel, accessories and equipment were widely sought after in China.

Under its initial public offering (IPO), XiDeLang is offering 100 million new ordinary shares of 10 US cents each at an issue price of 58 sen each. Of the total, 90 million shares are for private placement and 10 million for public subscription.

Of the RM58mil proceeds, RM9.2mil will be utilised for advertising and branding, RM18.4mil for expansion of marketing and distribution network and RM2.3mil for research and extension of product portfolio.

Another RM16.1mil will be used for expansion of production capacity, RM4mil for working capital and RM8mil for listing expenses.

Ding said the proceeds would be used to expand the company’s production capacity, product portfolio, distribution network and boost its brand recognition through advertising.

“We currently have two distributors in three provinces in the north-east, namely Liaoning, Heilongjiang and Jilin.

“We will help the new distributors establish not less that 200 retail locations by the end of 2010,” Ding said.

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