Bags / Shoes & Accessories

On August 13, the shoe giant Baocheng released its financial report:

Benefited from the double growth of shoemaking and distribution operations, and the recognition of Nanshan Life’s transfer investment income of 7.243 billion yuan, the semi-annual report performed well. The consolidated revenue in the first half of the year was 135.792 billion yuan, an annual increase of 10.5%, and the net profit after tax was 99.7. Billion yuan, an annual increase of 14.11 times, a record high over the same period, with EPS reaching 3.38 yuan.

Baocheng pointed out that the revenue of Yue Yuen's footwear manufacturing business in the first half of the year increased by 8.1%, mainly due to the rebound in demand for footwear products, coupled with continuous optimization of the product mix, and the increase in shipments and average selling prices of finished shoes.

By category, revenue from sports and outdoor footwear increased by 8.2% to US$2.081 billion; sales of casual shoes and sports sandals rose by 33.4% to US$424 million; revenue from soles, accessories and other products increased by 58.2% to US$281 million.

In the sports goods retail and brand agency business of its subsidiary Baosheng, although the sales in the second quarter were affected by the fluctuation of the consumer market, the mainland's consumption power in the first quarter was strong, which pushed up the annual revenue growth of 14% in the first half of the year.

Source: Screenshot of Yue Yuen Group's financial report

Baocheng announced that the group shipped more than 136 million pairs of shoes in the first half of the year, an annual increase of 5%, with an average unit price of US$18.37 per pair, higher than US$17.25 in the same period last year.

In the first half of the year, the proportion of shoe production capacity in various regions of the group was 45% in Vietnam, 41% in Indonesia, 10% in mainland China, and 4% in others.

Baocheng said that in view of the recent severe epidemic in Southeast Asia, which has affected the capacity of some factories so far in July, it will pay close attention to the subsequent changes in the epidemic, maintain maximum flexibility in capacity allocation, and continue to invest in key areas such as automation, process improvement and innovation capabilities. In response to the procurement needs of brand customers, ensure footwear manufacturing business.

Baocheng's consolidated revenue in the first half of the year has maintained growth, the capacity utilization rate of its footwear manufacturing business has steadily increased, and the sales mix of sporting goods retail and brand agency business has continued to improve. The interest rate of 26% is not only higher than the 20.6% in the same period last year, but also better than the 25.7% in the first quarter of this year.

With proper cost control, Baocheng's operating expense ratio in the first half of the year dropped from 23.5% in the same period last year to 21.3%. Its operating net profit was 6.431 billion yuan, an annual increase of 282.5%, and its operating net profit margin reached 4.7%.

Baocheng recognized 8.197 billion yuan in investment income in the first half of the year under the equity method, which was higher than 4.169 billion yuan in the same period last year. Among them, Baocheng's 20% stake in Runcheng Investment Control reinvested in Nanshan Life Insurance, which contributed 7.243 billion in reinvestment income in the first half of the year. Yuan, higher than 3.915 billion yuan in the same period last year.