China Dongxiang (Group) Co., Ltd., which owns the rights to the Kappa brand in mainland China and recently bought a Japanese ski brand, reported revenue grew 28.4 percent to RMB597 million ($97 mm) for the six months ended June 30, while profit attributable to shareholders increased 202.1 percent, year-on-year, to RMB290 million.

Basic earnings per share improved 200.6 percent, year-on-year, to RMB5.26 cents. Interim dividend and special interim dividend is RMB1.57 cents and RMB2.10 cents respectively (in total RMB3.67 cents per share). The Group announced its unaudited interim results for the six months ended June 30, 2015.

Group Results Highlights

1H2015

(RMB million)

1H2014

(RMB million)

Change

Revenue

597

465

28.4%

Gross profit (before provision for

/reversal of impairment losses of

inventories)

344

215

60.0%

Gross profit margin (before provision

for/reversal of impairment losses of

inventories)

57.6%

46.2%

11.4 pts

Operating profit

387

149

159.7%

Profit for the period attributable to

equity holders of the Company

290

96

202.1%

(RMB Cents)

(RMB Cents)

Basic earnings per share

5.26

1.75

200.6%

Interim dividend and interim special

dividend per share

3.67

1.22

200.8%

Total dividend payout ratio

70%

70%

—

Management discussion

The Group reported that it is especially delighted with its growth in the China segment for the first half of 2015, which has been beyond expectation. Revenue from the Kappa brand grew 46.4 percent to RMB464 million ($76 mm). Meanwhile, the gross profit margin of Kappa brand in the China segment rose 10.7 percentage points to 66.3 percent as a result of the increase in sales of new products as well as improvements in the proportion of replenishment orders and sales discounts.

The growth of Kappa in the China segment was mainly due to the prudent management based on the previous successful reforms, continuous efforts in consolidating the business models of “brand + product” and “brand + retail,” and the gradual launch of strategic measures focused on brand, operation, marketing and supply chain.
 
The board of directors has proposed distributing 30 percent and 40 percent of the net profit attributable to equity holders for the six months ended June 30, 2015 as general dividend and special dividend respectively, which equals RMB1.57 cents and RMB2.10 cents respectively.

China Dongxiang (Group) Co., Ltd. is primarily engaged in the design, development, marketing and wholesale of branded sportswear in China. Currently, China Dongxiang owns all rights to the internationally renowned Kappa brand in Mainland China, Macau and Japan. On May 1, China Dongxiang completed the acquisition of Phenix, a Japanese sportswear enterprise. Phenix is the most popular ski brand in Japan with the largest market share, as well as a well-known brand in the international market.