Xingquan denies claims on idle production lines

KUALA LUMPUR: Shoemaker Xingquan International Sports Holdings Limited has slammed a blog criticising its idle production on a popular stock investment portal as defamatory.
Executive chairman and CEO Datuk Wu Qingquan said the blog was not realistic, as a factory has its production and off-production hours.
"One can simply take a photo of an empty factory after its working hours. If the factory is not running, why were there so many raw materials there?" Wu who spoke in Mandarin, said.
He added that the photos on the blog showed raw materials, semi-finished and finished goods in the factory, which could have been taken during off-production hours.
"This (blog) is not true and is defamatory," Wu told reporters after its special general meeting here last Friday.
The blog, headlined "Unravelling Xingquan – Xingquan, the hollow story", submitted several postings of Xingquan's factory in Fujian province, China, telling readers that it will reveal more photos in ensuing articles.
The blog also condemned Xingquan for its old machineries and warehouse with pathetic inventories, as well as describing Xingquan's handful of staff "with nothing on their desks" and playing games during working hours.
The company said it will investigate more about the blog and the blogger involved.
Wu said it is business as usual for the company and that orders are normal, adding that its net profit is still stable.
For the first quarter ended Sept 30, 2015 Xingquan made a net profit of RM7.12 million compared with RM39.43 million for the same quarter a year ago, due to a decline in both shoes and apparel sales volume.
This was on 33.3% lower revenue of RM134.77 million, compared with RM202.05 million for the same quarter in 2014.
Xingquan is principally involved in the manufacturing of shoe soles and shoes, as well as the sale of products ranging from shoe soles, shoes, apparel to accessories. It markets the Gertop brand under the outdoor casual wear segment in China.
Meanwhile, Wu said the company aims to boost its online sales contribution to 20% this year, from less than 10% now, by working with more e-commerce platforms in China. He said there are easily 100 e-commerce platforms there.
Increasing sales through online e-commerce platforms is part of its strategy to mitigate the various challenges in China, such as a slower gross domestic product growth, the crashing of China's stock market and the rising expansion of e-commerce platforms in China.
The company is also in the midst of identifying and opening profitable point of sales, improving its existing products and expanding its product range, for example, venturing into the production of knit fabric. In addition, it is also eyeing new business opportunities, including the acquisition of another brand or company.
Earlier at its special general meeting, shareholders approved the proposals of a capital re-organisation that includes a par value reduction. Shareholders also approved the proposed rights issue with warrants to raise a minimum of RM26.94 million that will be used mainly for the purchase of machineries.