|
|
Home  Story Archive 2008 CHINA ZAINO: Sold 1.6 million luggages in 6 months!
|
CHINA ZAINO: Sold 1.6 million luggages in 6 months! |
|
|
|
Written by Leong Chan Teik
|
|
Thursday, 07 August 2008
|
 About 20 analysts and fund managers attended the China Zaino's results briefing today (Aug 7). Photo by Sim Kih
FROM A standing start, China Zaino has demonstrated how fast it can sell a new product and how extensive its distribution network is.
The product in question are luggages, which Zaino launched in September last year.
In the first quarter of this year, it sold 782,000 luggages. In Q2, it was even more: 845,000.
That translates into about 9,000 luggages a day!
 Zaino chairman Chen Xizhong. Photo by Sim Kih
The sales via its 3,200 concessionary retail outlets brought in RMB339.5 million in the first half of this year, which was 32.4% of Zaino’s total sales. Its other product are backpacks.
The results show that luggages were the engine of growth for the company, and they brought in more money per unit of sale. Their average selling prices were about 2.8X that of Zaino’s backpacks.
Luggages will continue to be the company’s growth engine, said executive chairman Chen Xizhong, at a briefing for analysts and fund managers today (Aug 7).
So fast has its luggages sold that the company believes it is very close to being among the Top 10 luggage players in China.
Higher value-added backpacks
Meanwhile, revenue from Zaino’s backpacks grew 12.2% in the first half of this year to RMB709.3 million on higher selling prices.
The number of units sold in Q2 dropped 14.5% to 4,839 as Zaino’s product mix shifted away from lower-value backpacks.
Zaino, which was listed on SGX in April this year, is the No. 1 backpack company in China.
Its net profit for the first half of this year jumped 69.4% to RMB212.6 million. Revenue rose 65.9% to RMB1,048.9 million.
Zaino’s CFO Lawrence Lam pointed out that the bottomline would have been even more glowing if not for RMB5.5 million in expenses relating to its IPO.
He said Zaino’s financial performance has exceeded the industry growth of around 20%.
 Analysts learnt about Zaino's plan to double its production capacity by 2010 from CFO Lawrence (front row, left) and chairman Chen (right). Photo by Sim Kih
Demand for bags and luggage has been increasing as more Chinese travel. The bagpack and luggage industry is in the early to mid-phase of growth, and manufacturers are enjoying good profit margins, said Lawrence.
Zaino’s net profit margin for the first half of this year was a handsome 20.3%.
Its net cash from operations was RMB231.9 million, a sharp improvement from RMB159.4 million.
Zaino is in a very healthy cash position as it has RMB806.3 million in cash as at June 30.
To strengthen its foothold in the industry, Zaino is increasing its branding efforts for its "Dapai" brand. It has engaged Olympic diving gold medalist Tian Liang for TV commercials.
As its products continue to sell well, Zaino is expanding its production capacity. Aside from in-house production, it is looking for a third factory to outsource its production to. It is also in negotiations to buy land to build a new factory that will double its existing production capacity to more than 52.2 million units by 2010.
Recent stories:
CHINA ZAINO: What 7 analysts say after plant trip
CHINA ZAINO: Wooing China’s Generation Y
|
|
|
