XTEP International Expects Net Profit To Grow To HK $520 Million.

Xtep International Holdings Ltd., XTEP international, said on Tuesday that it expects net profit to grow more than double to HK $520 million this year. The company hopes to raise its initial public offering (IPO) up to $388 million before listing in Hongkong, International. The company's XTEP brand has a 3.4% share in the Chinese sports shoes market, second only to Nike (Nike) and Adidas (Adidas) and other international brands. In its prospectus, the company said its net profit last year was 221 million 900 thousand yuan. Ding Shuibo, chairman of XTEP international, said he expects profits this year to be boosted by higher retail prices. He said that the average selling price of sports products increased by 15% this year, and he believed XTEP could reach the benchmark level of the industry. XTEP International said its sports shoes last year sold for an average price of 70 yuan per pair and 54 yuan for clothing. The company is also an exclusive distributor of Disney Sport in China and provides original equipment manufacturing services. XTEP International said its gross profit margin for raw equipment manufacturing last year was 11.2% and XTEP's gross margin was 34.5%. He said that now the original equipment manufacturing business contributed 7.8% of revenue; this year the proportion will fall to 2%, the next two years, the proportion will be less than 1%. According to the prospectus, XTEP international IPO will issue 550 million new shares, issuing guidance price range from 4.05 to HK $5.50 per share. Its shares will be listed on the Hongkong stock exchange in June 3rd. JPMorgan Chase & Co. (JPM) and UBS AG (UBS), Morgan, are the bookkeeping offices of IPO.