Press Releases

> IR Home >News & Events>Press Releases

China Xiniya Fashion Limited Reports 2017 First Half Financial Results

2017-08-29

XIAMEN, China, Aug. 29, 2017 /PRNewswire/ -- China Xiniya Fashion Limited ("Xiniya" or the "Company" NYSE: XNY) today reported financial results for the first half of 2017. The unaudited consolidated financial statements and other financial information included in this press release have been prepared in conformity with International Financial Reporting Standards ("IFRS").

The Company publishes its consolidated financial statements in Renminbi ("RMB").

First Half 201 7 Highlights

  • Revenue during the first half of 2017 was RMB120.3 million, as compared to revenue of RMB15.1 million in the first half of 2016.
  • Total loss during the first half of 2017 was RMB51.5 million, as compared to total loss of RMB129.2 million in the first half of 2016.
  • Loss per ADS was $0.53 in the first half of 2017 as compared to loss per ADS of $1.37 in the first half of 2016.

First Half 201 7 Results

Revenue for the first half of 2017 was RMB120.3 million, an increase from RMB15.1 million during the first half of 2016. During the first half of 2017, the Company achieved a revenue of RMB120.3 million, as compared to a net revenue of RMB15.1 million during the first half of 2016 which comprised of a revenue of RMB139.6 million less repurchased inventory of RMB124.5 million. The repurchased inventory of RMB124.5 million was a reduction in revenue.

Excluding the inventory buyback in the first half of 2016, the Company delivered approximately 1,232,000 units to it's customers during the first half of 2017, compared with 1,320,000 units during the first half of 2016.

The Company's network of authorized retailers had a net reduction of 20 authorized retail outlets in the first half of 2017, consisting of 41 new authorized retail outlets opened and 61 authorized retail outlets closed. The total number of authorized retail outlets was 427 as of June 30, 2017. The table below sets forth the number of retail outlets by outlet type:

 

Outlet Type:

As of December
31, 201
6

As of June

3 0 , 201 7

Company operated flagship store

1

1

D istributo r operated stores

28

26

Distributo r operated flagship store

1

1

Distributor operated retail website

1

1

A uthorized r etailers operating outlets

416

398

Total

447

427

The cost of sales increased from RMB100.7 million in the first half of 2016 to RMB138.1 million in the first half of 2017. The increase in cost of sales was primarily attributed to the write down of inventory to net realizable value of RMB22.2 million during the first half of 2017. During the first half of 2017, the cost of sales comprised of RMB115.9 million cost of sales and the inventory write down of RMB22.2 million. During the first half of 2016, the cost of sales comprised of RMB141.4 million cost of sales less the net realizable value of repurchased inventory of RMB40.7 million. The net realizable value of repurchased inventory of RMB40.7 million was a reduction in cost of sales.

Gross loss was RMB17.8 million in the first half of 2017 as compared to gross loss of RMB85.6 million in the first half of 2016. The gross loss in the first half of 2016 was higher, this was due to inventory buyback in the first half of 2016.

Interest and other income was RMB0.5 million in the first half of 2017 as compared to RMB2.2 million in the first half of 2016. The decrease was mainly due to no time deposit placed with banks during the first half of 2017.

Selling and distribution expenses were RMB24.7 million in the first half of 2017, a decrease from RMB36.0 million during the first half of 2016. The decrease was primarily attributed to the reduction of advertising and shop rack expenses.

Administrative expenses were RMB9.5 million in the first half of 2017, a decrease from RMB10.3 million during the first half of 2016. The decrease was primarily due to reduction of headcount, office and other miscellaneous expenses during the first half of 2017.

Total loss for the period was RMB51.5 million in the first half of 2017, as compared with total loss of RMB129.2 million during the first half of 2016.

Loss per ADS was $0.53 in the first half of 2017, compared to loss per ADS of $1.37 the first half of 2016.

Financial Position

As of June 30, 2017, the Company had cash and cash equivalents of RMB52.7 million.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Exchange Rate Information

The United States dollar ($) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the certified exchange rate of $1.00 = RMB6.7793 on June 30, 2017 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into $ at that rate on June 30, 2017, or at any other date. The percentages stated are calculated based on RMB amounts.

About China Xiniya Fashion Limited

Xiniya is a leading provider of men's business casual apparel in China. The Company designs men's business casual and business formal apparel and accessories, which are marketed under the Xiniya brand, and sells through its distributors and retail network. Its products are sold to consumers at authorized retail outlets owned and managed by third parties located in 20 provinces, four autonomous regions, and four municipalities in China. This retail network focuses on second and lower-tier cities, where increasing affluence has led to an improvement in living standards and where most international men's apparel brands do not have a significant presence. The Company's target consumers are male working professionals in China between the ages of 25 and 45 who seek fashionable clothing to suit their working and lifestyle needs. For more information, please visit the Company's website at http://www.xiniya.com.

For additional information, please contact:

China Xiniya Fashion Limited
Mr. Chee Jiong Ng
Chief Financial Officer
Telephone: +86-136-5593-9932
Email: ngcheejiong@xiniya.com

 

 

CHINA XINIYA FASHION LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE SIX MONTHS ENDED JUNE 30

(Expressed in thousands, except per share and per ADS amounts)


201 6

RMB


201 7

RMB

201 7

USD


(Re-presented)





(Note 1)




Continuing operation:





Revenue


Cost of sales


Gross loss







Interest and other income

517


Selling and distribution expenses


Administrative expenses

(2,499)


(3,886)

(573)

Loss before taxation

(1,982)


(3,886)

(573)

Income tax expense


Loss from continuing operation

(1,982)


(3,886)

(573)

Discontinued operation:





Loss from discontinued operation

(127,247)


(47,587)

(7,020)

Total loss for the period

(129,229)


(51,473)

(7,593)

Other comprehensive income for the period:





Exchange differences on translation of financial statements of entities
outside the mainland of the People's Republic of China

 

562


 

450

 

66

Total comprehensive loss for the period

(128,667)


(51,023)

(7,527)






Loss per share - basic and diluted (in RMB)

(0.57)


(0.23)


Loss per ADS - basic and diluted (in USD)

(1.37)


(0.53)







Weighted average shares outstanding in the period ('000)

227,717


227,717


Weighted average ADS outstanding in the period ('000)

14,232


14,232







One ADS represents 16 ordinary shares.





 

 

CHINA XINIYA FASHION LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in thousands)


As of

December 31,


As of

June 30 ,

As of

June 30 ,


2016


2017

2017


RMB


RMB

USD




Unaudited

Unaudited


(Note 1)


(Note 1)

(Note 1)

Assets





Non-current assets





Property, plant and equipment


Intangible assets


Total n on-current assets







Current assets





Cash and cash equivalents


Trade receivables


Prepayments to suppliers


Inventories


Other receivables and prepayments


Total current assets


Total non-current and current assets


Assets of disposal group classified as held for sale

545,707


514,643

75,914

Total assets

545,707


514,643

75,914






Equity and liabilities





Equity





Share capital

77


77

11

Additional paid-in capital

519,077


519,077

76,568

Statutory reserve

122,615


122,615

18,087

Currency translation reserve

(16,986)


(17,436)

(2,572)

Accumulated losses

(236,824)


(288,297)

(42,526)

Total equity

387,959


336,036

49,568






Current liabilities





Trade payables


Deposits received from distributors


Other payables and accruals

518


229

34

Current income tax payable


Total current liabilities

518


229

34

Liabilities of disposal group classified as held for sale

157,230


178,378

26,312

Total liabilities

157,748


178,607

26,346

Total equity and liabilities

545,707


514,643

75,914

 

 

CHINA XINIYA FASHION LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30

(Expressed in thousands)


2016


2017

2017


RMB


RMB

USD

Cash flows from operating activities:





Loss before taxation





Continue operation

(1,982)


(3,886)

(573)

Discontinued operation

(127,247)


(47,587)

(7,020)

Loss for the period

(129,229)


(51,473)

(7,593)

Adjustments for:





Depreciation of property, plant and equipment

796


Amortization of intangible assets

2,393


Intangible assets written off

2,724


1,932

285

Interest income

(2,198)


(102)

(15)

Foreign exchange losses

453


427

63

Operating loss before working capital changes

(125,061)


(49,216)

(7,260)

Decrease in trade receivables

186,585


23,680

3,493

Decrease/(increase) in prepayments to suppliers

3,330


(350)

(52)

(Increase)/decrease in inventories

(92,321)


28,596

4,218

Increase in other receivables and prepayments

(66,618)


(5,297)

(781)

Increase/(decrease) in trade payables

5,730


(8,418)

(1,242)

Increase/(decrease) in deposits received from distributors

19,290


(720)

(106)

(Decrease)/increase in provision for estimated sales return

(2,540)


31,834

4,696

Decrease in other payables and accruals

(1,119)


(1,837)

(271)

Decrease in provision for liability

(84,300)


Cash (used in)/generated by operating activities

(157,024)


18,272

2,695

Income tax paid


Net cash (used in)/generated by operating activities

(157,024)


18,272

2,695

Cash flows from investing activities:





Interest received

16,677


102

15

Net cash generated by investing activities

16,677


102

15






Net (decrease)/increase in cash and cash equivalents

(140,347)


18,374

2,710

Cash and cash equivalents at beginning of the period

203,371


35,168

5,188

Exchange gains/(losses) on cash and cash equivalents

109


(877)

(129)

Cash and cash equivalents at end of the period

63,133


52,665

7,769

C HINA XINIYA FASHION LIMITED
NOTES TO THE FINANCIAL STATEMENTS

1. Group held-for-sale

On July 18, 2016, the Company announced that the Company's controlling shareholder, Qiming Investment Limited, a British Virgin Islands company (the "Seller") controlled by the Company's Chairman and Chief Executive Officer, Qiming Xu, entered into an agreement to sell a controlling interest in the Company (the "Agreement") to Perfect Lead International Limited and Honest Plus Investments Limited, both British Virgin Islands companies (collectively the "Purchasers").

As of the date of the Agreement, the Seller beneficially owns 134,359,960 ordinary shares of the Company, accounting for approximately 59% of the total outstanding shares of the Company. Pursuant to the Agreement, the Seller will sell 114,996,929 ordinary shares of the Company (the "Seller Shares"), or 50.5% of the total outstanding shares of the Company, to the Purchasers, for an aggregate purchase price of RMB86,426,661 (US$12,937,155), or RMB0.75 per ordinary share (or US$1.80 per ADS), which is approximately 172.57% of the volume weighted average closing price of the shares for the fifteen (15) trading days prior to and including July 15, 2016.

The closing of the above-mentioned share transfer requires, among other conditions, the following to occur first: (1) the Company's board of directors and shareholders must approve the sale of Xiniya Holdings Limited, the Company's wholly owned subsidiary in Hong Kong, to Mr. Qiming Xu or his designees at a price to be determined by an independent third party valuer (the "Xiniya Transaction"); and (2) the Company must take such corporate actions as are necessary to approve the acquisition of True Silver Limited ("True Silver"), a British Virgin Islands company, which will utilize a variable interest entity (VIE) structure to operate and consolidate 70% of the financial results of Hubei Chutian Lending Company, Ltd. ("Chutian"), a PRC company engaged in the lending of small loans to customers in China, at a price to be determined by an independent third party valuer (the "Chutian Transaction"). True Silver is wholly-owned by Honest Plus Investments Limited and indirectly controlled by Wei Qizhi who is the controlling shareholder of each of the Purchasers and the founder of Chutian. As a result of the Xiniya Transaction and the Chutian Transaction, the Company's core business will be changed from men's fashion to lending, which will be expanded to broader financial services in the future. In addition, the Purchasers' designees will be appointed as directors of the board, Chairman and Chief Executive Officer of the Company to be effective immediately after the closing.

The Seller and Purchasers also simultaneously entered into a voting agreement and irrevocable proxy, pursuant to which the Seller appoints the Purchasers as proxies authorized to vote all of the Seller Shares at any meeting of the shareholders of the Company and in connection with any corporate action by the shareholders of the Company related to the Xiniya Transaction and the Chutian Transaction. The closing of the purchase and sale of the Seller Shares will occur no more than ten (10) business days after all conditions precedent to the closing have been satisfied or waived.

The assets and liabilities attributable to Xiniya Holding Limited and its subsidiaries, which are expected to be sold within next twelve months from December 31, 2016, have been classified as a disposal group held for sale and are presented separately in the balance sheet. The proceeds of disposal are expected to exceed the net carrying amount of the relevant assets and liabilities and, accordingly, no impairment loss has been recognized on the classification of these assets classified as held for sale.

C HINA XINIYA FASHION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1. Group held-for-sale - continued

(a) The results of the discontinued operation and the re-presentation of the disposal group are as follows:



Six
months
ended
June 30,
201 6


Six

months
ended

June 30,

201 7

Six

months
ended

June 30,

201 7



RMB'000


RMB'000

USD'000







Revenue


15,093


120,263

17,740

Cost of sales


(100,725)


(138,062)

(20,365)

Gross loss


(85,632)


(17,799)

(2,625)

Interest and other income


2,198


529

78

Selling and distribution expenses


(36,033)


(24,719)

(3,646)

Administrative expenses


(7,780)


(5,598)

(826)

Loss before tax from discontinued operation


(127,247)


(47,587)

(7,019)

Income tax expense



Net loss after taxation from discontinued operation


(127,247)


(47,587)

(7,019)

(b) The impact of the discontinued operation on the cash flows of the Group is as follows:



Six
months
ended
June 30,
201 6


Six

months
ended

June 30,

201 7

Six

months
ended

June 30,

201 7



RMB'000


RMB'000

USD'000







Operating cash (outflows)/inflows


(157,024)


18,272

2,695

Investing cash inflows


16,677


102

15

Total cash (outflows)/inflows


(140,347)


18,374

2,710

C HINA XINIYA FASHION LIMITED
NOTES TO THE FINANCIAL STATEMENTS

1. Group held-for-sale - continued

As a result of foregoing, the assets and liabilities related to Xiniya Holdings Limited and its subsidiaries have been presented as held for sale:

(c) Assets of disposal group classified as held for sale


As of
December
31,
2016

As of

June 30,
201 7

As of

June 30,
201 7


RMB'000

RMB'000

USD '000

Property, plant and equipment

2,172

2,172

320

Intangible assets

36,934

35,002

5,163

Cash and cash equivalents

35,168

52,665

7,769

Trade receivables

281,634

257,954

38,050

Prepayments to suppliers

25,300

25,650

3,784

Inventories

62,905

34,309

5,061

Other receivables and prepayments

101,594

106,891

15,767

Total

545,707

514,643

75,914

(d) Liabilities of disposal group classified as held for sale


As of
December
31,
2016

As of
June 30,
201 7

As of
June 30,
201 7


RMB'000

RMB'000

USD '000





Trade payables

16,812

10,980

1,620

Deposits received from distributors

46,380

45,660

6,735

Provision for estimated sales return

79,039

110,873

16,354

Other payables and accruals

12,586

8,452

1,247

Current income tax payable

2,413

2,413

356

Total

157,230

178,378

26,312

Net assets directly associated with disposal group classified as held-for-sale

388,477

336,265

49,602

(e) Due to discontinued operation, certain re-presentation has been made to the June 30, 2016 consolidated statement of comprehensive loss to enhance comparability with current period's presentation. The items re-presented were as follows:



For the six months ended June 30, 2016



After re-
presentation


Before re-
presentation

 

Difference



RMB'000


RMB'000

RMB '000







Revenue



15,093

(15,093)

Cost of sales



(100,725)

100,725

Gross loss



(85,632)

85,632

Interest and other income


517


2,715

(2,198)

Selling and distribution expenses



(36,033)

36,033

Administrative expenses


(2,499)


(10,279)

7,780

Loss before tax from continued operation


(1,982)


(129,229)

127,247

Loss from discontinued operation


(127,247)


(127,247)

Income tax expense



Net loss after taxation


(129,229)


(129,229)

Go to top