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Quarterly Report For The Financial Period Ended 31 December 2016

Financials Archive

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Unaudited Condensed Consolidated Statements of Comprehensive Income
For The Second Quarter Ended 31 December 2016

Income Statement
 

Condensed Consolidated Statements of Financial Position
As At 31 December 2016

Balance Sheet
 

Review Of Performance

  1. Financial Period-to-date vs. Previous Financial Period-to-date

    The Group achieved a revenue and profit before tax ("PBT") of RMB199.5 million and RMB32.6 million respectively for the 6 months financial period ended 31 December 2016 ("FPE2017"). The revenue of RMB199.5 million represents a decrease of 55.6% as compared to the revenue of RMB449.5 million recorded for the 6 months financial period ended 31 December 2015 ("FPE2016").

    The decrease in revenue is contributed by the following:

    1. Decrease in sales volume of shoe from 0.5 million pairs in FPE2016 to 0.3 million pairs in FPE2017.

    2. Decrease in sales volume of apparels from 1.4 million pieces in FPE2016 to 0.5 million pieces in FPE2017

    The PBT of RMB32.6 million for FPE2017 represents a decrease of 66.4% as compared to the Profit before taxation ("PBT") of RMB97.1 million recorded for FPE2016. The decrease in PBT was mainly due to the decrease in overall revenue.

    The decrease in selling and distribution expenses from RMB64.3 million in FPE2016 to RMB23.6 million in FPE2017 is mainly due to lower expenses in relation to market development costs and subsidy of renovation. .

    The profit after taxation ("PAT") of RMB28.8 million for FPE2017 represents a decrease of 63.7% as compared to PAT of RM79.2 million recorded for FPE2016 due to the reason stated above.

    The effective tax rate decreased from 18.4% for FPE2016 to 11.8% for FPE2017 due to higher unrealised gain on foreign exchange differences.

    Performance of the respective operating business segments for FPE2017 as compared to FPE2016 is analysed as follows:

    Shoe soles - The decrease in revenue from RMB74.9 million for FPE2016 to RMB63.6 million for FPE2017 was mainly due to decrease in production from 5.1 million pairs for FPE2016 to 4.3 million pairs for FPE2017.

    Shoes - The decrease in revenue from RMB91.7 million for FPE2016 to RMB32.4 million for FPE2017 was mainly due to decrease in production from 0.5 million pairs for FPE2016 to 0.3 million pairs for FPE2017.

    Apparels - The decrease in revenue from RMB273.2 million for FPE2016 to RMB81.8 million for FPE2017 was mainly due to decrease in in sales volume from 1.4 million piece for FPE2016 to 0.5 million piece for FPE2017

  2. Current Quarter vs. Previous Year Corresponding Quarter

    The Group achieved a revenue and profit before taxation ("PBT") of RMB116.4 million and RMB13.8 million respectively for the current quarter ("Q2FY2017"), representing decrease of 50.4% and 75.5% in revenue and PBT respectively as compared to the corresponding period in the preceding year.

    The decrease in revenue is contributed by the decrease in sales volume of shoe, shoe sole, apparels and accessories in Q1FY2017.

    The profit before taxation is RMB13.8 million for this quarter, represents a decrease of 75.5% as compared to the PBT of RMB56.3 million recorded for Q2FY2016.

    Performance of the respective operating business segments for Q2FY2017 as compared to Q2FY2016 is analysed as follows:

    Shoe sole - The decrease in revenue was mainly due to decrease in sales volume.

    Shoe - The decrease in revenue was mainly due to decrease in sales volume.

    Apparel - The decrease in revenue was mainly due to decrease in sales volume.

Prospects for FPE 2017

The China economic uncertainties and rising costs of doing business have adversely impact our business. In addition, the change of consumer shopping behavior, spending pattern and stiff competition from e-commerce players have also negatively affected our performance. Our Board of Directors believes the Group's prospect for the financial year ending 30 June 2017 to be challenging.