China Accounts For Only 25% Of Yuyuan Group'S Footwear Output Last Year.

Thanks to revenue growth of 5.3%, the world's largest

Manufacturer Taiwan

The group's subsidiary Yuyuan Industrial (Holdings) Holdings Limited increased its net profit in the 2015 fiscal year by 17.9%, from $331 million in fiscal 2014 to $390 million 200 thousand.

Yuyuan group's total revenue for the year amounted to $8 billion 434 million 500 thousand, compared with $8 billion 13 million 400 thousand the previous year.

Manufacturing revenues rose 1.6% to $6 billion 136 million 700 thousand, mainly driven by a 3.4% increase in output, while retail sales rose sharply from 16.3% to $2 billion 298 million 200 thousand.

Yuyuan group's retail business is managed by its listed Affiliated Companies Baosheng International (Holdings) Limited, which is the second largest sporting goods manufacturer in the world, Adidas AG.

Group's largest distributor in mainland China.

The largest category of sneakers in manufacturing business was $4 billion 15 million 900 thousand, an increase of 3.8% over the previous year; casual shoes / outdoor shoes fell 4.4% to 1 billion 365 million 900 thousand dollars; sports sandals increased from 10.9% to 94 million 400 thousand dollars; soles, accessories and other items increased slightly by 1.1% to 660 million 500 thousand dollars.

The total output of shoes was 317 million 500 thousand pairs, and the average selling price decreased by 1.6% to 17.25 dollars compared with that of the previous year, 17.53 dollars in the previous year.

China accounted for only 25% of Yuyuan group's footwear output last year, down 4 percentage points from 2014, Vietnam's share rose from 39% to 42%, and Indonesia's 32% share remained stable, accounting for 1% in Burma and other places.

In its earnings report, the group said it would still prioritize and optimize production capacity among different countries this year, and continue to expand its capacity in Vietnam, Indonesia and Burma.

At the end of 2015, Bank of America Merrill Lynch, Merrill Lynch and Merrill Lynch predicted that the continued pfer of capacity would continue to oppress the profitability of OEM business, which would last until the end of 2016.

Last April, employees in the Dongguan high factory district of Yuyuan group went on strike for social security funds and other issues, and Adidas AG Adidas group moved some of the orders.

Colin Currie, general manager of Adidas Group China, Adidas AG, revealed at the beginning of this month that it would continue to retain China's capacity.

China is the largest purchasing market of the group. According to the annual report released by the group last week, the products of the 29% Adidas brands such as Adidas, Reebok Reebok, TaylorMade-Golf and Ashworth, and so on, were "made in China", the proportion decreased by 2 percentage points compared with that in 2014, while the output of Kampuchea and Vietnam increased by 3 percentage points, respectively, 19% and 16% respectively.

The two customers, who accounted for more than 10% of Yuyuan group's revenues, brought in 1 billion 683 million 400 thousand US dollars and 1 billion 394 million 500 thousand US dollars respectively, while the former recorded a 0.8% decline, while the latter had a 11.5% increase.

In terms of source of revenue, revenue from us customers decreased by 3.9% to US $2 billion 124 million 100 thousand over the same period, accounting for 1/4 of total revenue. European customer revenue rose by 9.6% to US $1 billion 641 million 500 thousand, while revenue from Chinese customers contributed US $2 billion 913 million 200 thousand, a 12.9% increase.

Due to the downward trend of commodity prices, the cost of materials decreased, offset the increase in manufacturing costs caused mainly by the increase in employees' salaries (from 10% to 1 billion 100 million US dollars), and the gross margin of manufacturing business was relatively stable.

The retail business benefited from the increase in retail demand for sporting goods and the reduction in discount activities, driving the gross profit margin of the whole year to rise by 125 basis points, to 23.38%.

Yuyuan group's Baosheng international is China's largest distributor of Adidas AG Adidas group.

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Baosheng international retail business has also released its annual report for fiscal 2015.

Baosheng international revenue increased by 16.1% to 2 billion 300 million 200 thousand US dollars a year. The group pointed out that the warmer weather in the fourth quarter led to an increase in the same store sales than in the first three quarters.

Last year, Baosheng international continued to expand its store network based on the continued strong spending of consumer sports shoes and clothing.

As of December 31, 2015, Baosheng international has 4943 direct counters / shops and 2893 franchise stores in China, representing a net increase of 680 and 104 respectively over the same period of the previous year.

During the 2014 fiscal year, the group has gradually completed its OEM Lining business for domestic brands, such as 360 degree.

The gross margin was substantially improved by 400 basis points to 33.3%, mainly due to reduced retail price discounts.

Net profit was $64 million 498 thousand, which was 12.9 times higher than the 4 million 649 thousand US $2014 in fiscal year.

Baosheng international expects that this year's performance will continue to show improvement as more and more citizens participate in sports and other important sports events such as this year's Olympic Games and European Cup and the craze for marathon activities in China.

The annual performance of Baosheng International's main customer Adidas AG, Adidas group released earlier this month showed that the fixed exchange rate increased by 18% in the 2015 fiscal year of the Greater China region, up to 2 billion 469 million euros, or 17 billion 610 million yuan, which is the third largest market in the group and operating profit increased by 40.4%.

The Group believes that the slowdown in China's economic growth will not hurt the trend of rising demand for domestic sporting goods. Therefore, it intends to add 3000 stores in the next 5 years on the basis of the existing 9000 stores. The target of 2020 is to set up 12000 stores in 2200 cities in China. The focus of the plan is to speed up the layout of the smallest cities.

Such a radical expansion plan is extremely beneficial to Baosheng international. According to Goldman Sachs Group Inc. Goldman Sachs estimates, Baosheng international accounts for 1/3 of China's revenue from Adidas AG Adidas group.

Goldman Sachs said in its research report that Adidas AG Adidas group was mainly established by dealers in the bottom line city, so it believed that dealers would account for a considerable proportion of the 3000 new stores.

The bank expects Baosheng international to have a strong growth of 14% in the same store this year, and the store network will expand further, thus maintaining a "buy" rating.

Yuyuan group's board of directors proposed to distribute the final dividend of HK $0.80 per share in fiscal year 2014, with an annual dividend of HK $1.20 per share, up 4.3% from HK $1.15 in the previous year.

Baosheng international does not issue a final dividend.

Yuyuan group's stock price fluctuated narrowly on Thursday, ending 0.55% down to HK $27.1, which missed market expectations on Wednesday because of the growth of futures orders growth data of main customers Nike Inc., Nike group in the three quarter earnings. Yuyuan group plunged 4.06% to HK $27.2 on Wednesday.

Baosheng international fell more than 3% on Thursday afternoon after the reopening of the stock market, and the decline in late trading expanded to 4.19%, at HK $1.60. The stock has fallen by 13% since 2016, but recorded a cumulative increase of 203.8% over the past 12 months.