China Released Its Interim Results In 2019, With Orders For Footwear Products Surging

China Li Lang Limited (hereinafter referred to as China's real estate, stock number: 1234) announced its interim results in 2019: the income increased by 19.1% to RMB 1 billion 540 million yuan in August 13th. The increase in performance mainly reflects the further improvement of sales efficiency of LILANZ brand retail stores, which has been running for more than 18 months in retail stores.

Mr. Wang Dongxing, chairman and executive director of China's Li Lang, said: "China has been adhering to its business strategy in recent years to enhance product design and cost performance, speed up channel transformation, and maintain steady growth during the period. At the end of June 2019, LILANZ had a total of 2753 retail outlets nationwide, with a net increase of 83 during the period. In addition, the group continued to actively explore new retail businesses, and online store sales grew faster in the first half of the year.

In the first half of the fiscal year ending June 30th, the key financial data of China are as follows:

Revenue rose 19.1% to 1 billion 540 million yuan, and LILANZ brand revenue increased by 20.3%.

Operating profit of 465 million yuan, an increase of 21.9% over the same period, with a profit margin of 30.2%.

Net profit rose 14% to 390 million yuan, and net profit margin 25.2%.

Earnings per share increased by 14% to 32.5 yuan over the same period last year.

The total number of retail outlets increased by 83, and the number of shopping malls increased to about 680.

Retail stores recorded high unit sales growth in the first half of the year, maintaining a high single digit growth target in the second half of the year.

According to product categories, tops are still the main source of revenue, sales increased by 22.5% year-on-year, accounting for 53.6% of LILANZ brand revenue, and footwear products total orders increased by more than 50% in 2019, and sales increased by more than 30% during the period.

Regionally: sales increased in all regions except northeast China due to increased number of stores and comparable sales growth. Among them, North China (including Beijing, Hebei, Shanxi, Tianjin and Inner Mongolia) performed best and sales increased by 40%. Sales in East China (including Jiangsu, Zhejiang, Shanghai, Anhui, Fujian, Fujian and Fujian) and central and southern regions (including, 26.8%, 22.6%, respectively, respectively) increased by 26.8% and 22.6% respectively. In the northeast region (including Heilongjiang, Jilin and Liaoning), the sales in the first half of the fiscal year were basically flat compared with the same period last year because of the decline in the number of stores in 2018.

Above: in the first half of the fiscal year, China's sales performance in various regions (southwest China including Chongqing, Guizhou, Sichuan, Yunnan and Tibet; Northwest China including Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang)

　　 Develop and upgrade sales channels in an orderly manner.

The group's market expansion plan continued orderly, and the total number of retail outlets increased by 83 in the first half of this year, pushing ahead with the goal of opening about 200 stores a year as planned. At the end of June 2019, LILANZ had 2753 retail outlets nationwide, of which 43 were independent business stores, and 255 were in the period. The total area of LILANZ retail outlets increased by 3.7% to 394100 square metres by the end of last year.

In addition, the Group continues to actively promote the upgrading of sales channels and optimize the retail network. Distributors continue to increase their sales in shopping malls at provincial level and prefecture level cities. By the end of June, there were more than 680 shopping malls, accounting for nearly 1/4 of the total number of stores. In addition, the proportion of primary retailers operating in the total number of stores continued to rise, reflecting the continued expansion of the group's coverage in the first and second tier markets and the continuous improvement of retail management level.

In the development of new retail business, the LILANZ main line and light business series have set up online stores on major online sales platforms, and provide customer relationship management services through WeChat platform. During the period, the group planned different activities to promote two series of e-commerce business, such as the introduction of special products of e-commerce, cooperation with net red, and strengthened investment in well-known portal websites and Baidu search. During the period, the sales volume of e-commerce increased considerably.

In terms of brand building, the main series will launch a more fashionable seventh generation store image in the second half of the year, and plan to extend it to other stores in 2020. The group is also actively preparing for the 2020 spring summer launch of the official licensing (IP) joint product to expand customer base from different channels.

The group's light business series operation center in Shanghai has been put into operation in the fourth quarter of last year, and expects to recruit talents in product design and brand promotion in the second half of the year. The new headquarters in Fujian is expected to be launched in 2020.

President Wang Dongxing concluded: "the group is cautiously optimistic about the outlook for men's clothing industry in the second half of 2019, and is confident that orders for orders for 2020 and spring and summer August 12, 2019 will not be lower than the high single digit growth rate. The group will continue to expand steadily in the second half of the year so as to further enhance the market share of the group. The group will continue to improve the efficiency of retail stores and maintain the high single digit growth target for the same store in the second half of the year. In the long term development, China will continue its multi brand development strategy to enhance product competitiveness and cost-effective, and further consolidate China's leading position in the men's clothing industry and achieve sustainable long-term growth.

The group maintains fiscal stability and has sufficient cash flow. The resolution of the board of directors issued an interim dividend of HK $18 per share and a special medium-term dividend of HK $8 per share, representing a year-on-year dividend increase of 13% and maintaining a high dividend payout ratio.