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 2017
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 2017 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, 2016
|
As of
June
30,
2017
|
Company operated flagship
store
|
1
|
1
|
Distributor operated stores
|
28
|
26
|
Distributor operated flagship
store
|
1
|
1
|
Distributor
operated retail
website
|
1
|
1
|
Authorized retailers
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)
|
|
2016
RMB
|
|
2017
RMB
|
2017
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
non-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
|
CHINA 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.
CHINA 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, 2016
|
|
Six
months
ended
June
30,
2017
|
Six
months
ended
June
30,
2017
|
|
|
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, 2016
|
|
Six
months
ended
June
30,
2017
|
Six
months
ended
June
30,
2017
|
|
|
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
|
CHINA 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,
2017
|
As
of
June 30,
2017
|
|
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, 2017
|
As of
June 30, 2017
|
|
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)
|
—
|
View original
content:http://www.prnewswire.com/news-releases/china-xiniya-fashion-limited-reports-2017-first-half-financial-results-300510631.html
SOURCE China Xiniya Fashion Limited