[29 August 2011, Hong Kong] Boshiwa International Holding Limited (Stock code: 1698) ("Boshiwa" or the "Company", together with its subsidiaries, the "Group"), a leading and fast-growing developer and retailer of children’s product in China, today announced its consolidated results for the six months ended 30 June 2011.
During the period under review, the Group recorded revenue at approximately RMB876.7 million, which represents a 47.4% growth. Gross profit surged by 47.7% to approximately RMB388.2 million (2010: RMB 262.9 million). Profit before tax rose 9.2% to RMB186.7 million. Profit for the period attributable to owners of the Company increased by 11.9% to approximately RMB130 million from RMB116.2 million recorded in the corresponding period of 2010; where there was a 19.2% decrease upon basic earnings per share to RMB6.3 cents. (2010: RMB7.8 cents) The board of directors does not propose interim dividend for the period ended 30 June 2011 (2010: Nil).
Mr. Zhong Zheng Yong, Chairman and Chief Executive Officer of Boshiwa International Holding Limited, said: "The Group has sufficient capital in store expansion and marketing upon its listing in Hong Kong. We steer in expanding coverage of department store, Boshiwa street store, Boshiwa 365 stores and flagship store, and maintain a momentum of high growth."
During the period under review, the Group's retail outlets surged from 1,555 in December 2010 to 1,724. Amongst all, department store concessions increased by 149 to 1,626; Boshiwa street shops added 9 shops to 38; Boshiwa 365 stores increased by 8 to 44; as well as flagship stores increased by 3 to 16. Thus, the rapid expansion of sales network drove the Group’s revenue to RMB876.7 million. The revenue was derived from sales of children's apparel, footwear and accessories which increased by 32.1% to RMB593.5 million, as well as sales of other children’s products which surged significantly by 94.5% to RMB283.2 million.
The Group's cost of sales increased by 47.1% to RMB488.5 million in first half of 2011. The Group has achieved lower procurement cost by increasing its bargaining power and alongside with its sustained strong purchases. Meanwhile, the Group adhere advance payment in 2011 upon partial children wear to reduce procurement price.
The Group sustained strong financial positions in the period under review. As at 30 June 2011, working capital amounted to RMB2,662.9 million, representing a 17.2% increase when compared with 31 December 2010. Cash and bank balance reached RMB882.8 million (as at 31 December 2010: RMB1,690.2 million). No gearing ratio was presented, which sets the stage for its future development.
In January 2011, the Group introduced a playground named "Boshiwa BABYLAND", with advanced entertainment facilities implanted from Japan. In just a few months' time, “the number of "Boshiwa BABYLAND" expanded rapidly from one to three, reflecting the Group's leading position in children wear industry with its innovative sales channels.
Prospects
Going forward, Chairman Zhong concluded: "the Group has kicked off its cooperation with TAKARA TOMY, Japan's leading toy manufacturer in July this year, the two parties would not only cooperate on products and networks, but will jointly develop and produce products especially for kids in China. Such partnership further consolidates its leading position in the industry, as well as strengthens the Group's business potential."
Apart from that, by proactively promoting the integration of four networks (i.e. Internet of Things, Mobile Internet, retail store network and membership), the Group has achieved great success in raising cost effectiveness, and maximized marketing efficiency. Boshiwa pays high attention to the marketing of sina weibo, and was being invited as one of the first test users for sina weibo for corporate accounts in June. The Group also strives to sustain the growth in revenue and profit, and provides returns to shareholders with excellent performance.
To cater for a variety of customers’ needs, the Group has its own proprietary brands and licensed brands with unique brand and market positioning. As at 30 June 2011, the Group has three proprietary brands which are Boshiwa, Baby2 and Dr. Frog; as well as a number of licensed brands, such as Harry Potter, Prince of Tennis, NBA, Barcelona, Juventus, Manchester United, Bob the Builder and Thomas and Friends.