Xidelang targets M&As, e-commerce

KUALA LUMPUR: China-based casual and sport-shoe maker Xidelang Holdings Ltd, which expects its profit for the financial year ending Dec 31, 2017 (FY17) to double from a year ago, will focus on merger and acquisitions (M&A), and e-commerce activities in FY18.
Managing director and CEO Ding Pengpeng said it will look for trading or manufacturing companies as its M&A targets and will launch activities after Chinese New Year.
“We’ve been talking to some companies, mainly local companies. Most are unlisted companies, but they are not small either,” he told reporters after its EGM today.
He said Xidelang has successfully switched from an original equipment manufacturer to original design manufacturer shoemaker and is internationally recognised for manufacturing some international brands.
“We will acquire if there’s a right company as we have to look into management and operations.”
Ding said the demand for casual and sporting shoes has increased due to changing consumers’ lifestyle, noting that Xidelang is on a growth trajectory.
In line with its plan to push the e-commerce business in FY18, he said Xidelang plans to convert 100 of its retail outlets in China to product showrooms next year.
It will roll out e-commerce in the first two quarters of FY18, leveraging on a combination of product showrooms (offline) and orders placed via the internet (online) simultaneously.
“Currently our online orders are still small. 2018 is to push the online business,” said Ding, adding that e-commerce will also be a new growth point for Xidelang in the future. It will be investing “tens of millions” of ringgit in the preliminary e-commerce business, mainly in systems.
“What we manufacture must tie in to what the information and market wants,” Ding said of its FY18 growth target.
He is confident that FY17’s profit will double from last year’s, based on the net profit reported in the first three quarters, which has exceeded last year’s. For the nine months ended Sept 30, 2017, Xidelang more than doubled its net profit to RM13.77 million from RM4.82 million a year ago.
At the EGM, shareholders approved its proposed bonus issue on the basis of one bonus share for every one existing share. It involves a bonus issue of up to 894.18 million new shares of US$0.04 (RM0.16) each, expected to be completed by first quarter of 2018.