Sunday, April 18, 2021
Martin Hennecke
HKEx Stock Code : 03813 
Corporate Profile
The principal activities of the Group are (i) retailing of sportswear, (ii) distribution of licensed products, and (iii) manufacturing and sales of OEM footwear.

Business Review - For the year ended December 31, 2012

For each of our businesses, the retail business distributes a wide range of sportswear products, including various sports footwear, apparel and accessories, for certain leading international and domestic sportswear brands to end customers through our directly operated retail outlets, and also to retail sub-distributors on a wholesale basis, which in turn sell the products through their respective retail outlets under our supervision. As at December 31, 2012, the Group had 3,659 directly operated retail outlets and 2,276 retail sub-distributors, and directly retail outlets and retail sub-distributors operated by our regional joint ventures' amounted to 749 and 691 respectively.

For our brand licensee business, in order to cope with the Group's future plan, we early terminated respective brand licensee agreements with Wolverine and Hush Puppies in the Greater China and the PRC respectively on April 30, 2012. At present, the Group remains as the exclusive brand licensee of international brands such as Converse, Reebok and Hush Puppies in specific regions in the Greater China and is also negotiating with several famous outdoors brands such as O'Neill.

The brand licensee agreements entered into by the Group typically granted us exclusive rights to design, develop, manufacture, market and distribute, and the flexibility to set retail prices for products of the licensed brands in specified locations within the Greater China Region for a specified period of time. Moreover, the exclusive brand licensee agreement for Converse in Hong Kong, Macau and Taiwan and for Hush Puppies in Taiwan expired on December 31, 2012. In February 2013, the Group entered into an agreement in respect of the brand licensee arrangement of Hush Puppies in Taiwan to extend the term of the licensee agreement for three years to December 31, 2015. Currently, the Group is in negotiation with Converse to extend the term of the brand licensee agreement in Taiwan for one year to December 31, 2013 and expected that relevant arrangement will be completed shortly.

In our manufacturing business, the Group manufactured OEM/ODM products for various brands, namely Li Ning, ANTA and 361X.

Business Outlook - For the year ended December 31, 2012

In view of the increase in health awareness, disposable income of consumers, sport awareness and participation, the Group remains optimistic about the mid- to long-term future of sports industry. We believe that the demand for functional sports and sports leisure will bring the second upsurge in the industry within next few years. We hope under the above mentioned effort, the profitability of the Group can resume and further enhance. Besides, branded companies are re-allocating their resources to large retailers due to the boom in density of retailers, giving rise to innovative operating models and enormous business opportunities. For example, due to higher rentals and labour cost in the matured sports markets such as Hong Kong and Taiwan, retailers have to increase turnover frequencies and refine management to sustain its profit margin and obtain higher investment return. It means that the underdeveloped market in China still has huge room for improving the prevailing operating conditions.

We believe that after the industry adjustment and as a result of our effort in 2013, the Group will be well positioned for next reform and upspring in the sports industry further with healthy and solid business foundation.

Source: Pou Sheng Int'l (03813) Annual Results Announcement
Chairman TSAI David, Nai Fung Issued Capital (shares) 5,373M
Par Value HKD 0.01 Market Capitalisation (HKD) 1,612M
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