Shoe Companies Are Pleased To Be Cautious In July 11Th.

<00977.HK>, the mainland sports shoes and apparel chain group, announced that it plans to issue 500 million shares (public offering and placement 10% and 90% respectively), of which 100 million shares are old stock, and the price is 1.38-1.98 yuan, 2000 shares per hand, and the admission fee is 3999.96 yuan.

The scale of financing was 6.9-9.9 billion yuan, which was publicly subscribed in June 27th, closing at 12 noon on July 3rd and July 11th.

The sponsor is Goldman Sachs and Kai Ji finance.

In terms of sales revenue, Xi Dalong is one of the largest sports and leisure apparel brands in China.

Since its six opening in 2002, it has grown rapidly in China's two or three tier cities.

According to the Market Research Report, the market leader position of the top five Chinese sports apparel brands has been built in China, especially in the southwest, northeast and northwest regions.

The company is engaged in the design, development and wholesale business of footwear, clothing and accessories products with the brand of "Xi Dalong".

There are three categories of products: (I) shoes, including

,

,

Skateboard shoes and

(II) clothing, mainly including sports tops, sports pants, jackets, sportswear and jackets, and (III) accessories, mainly including bags, socks, hats and caps.

At the end of last year, sales of shoes, clothing and accessories accounted for 52%, 46.1% and 1.9% of the total revenue respectively.

As Chinese consumers' demand for fashion and leisure products is increasing and their health awareness has improved, China's market for running shoes has developed rapidly, and running shoes are the main footwear products of Xi De long, accounting for 28.1% of the total revenue of 2007.

With the focus on the two or three tier cities, the city is moving towards urbanization, coupled with strong economic growth, and the biggest opportunity for retailers to add retail outlets.

The target customer is located between 15 and 35 years old.

We plan to adopt a mid-range pricing strategy to deepen market penetration in these areas, and the average retail price of sports and leisure shoes is set at each pair.

200 yuan to RMB 300 yuan.

Xi dragon is more determined to establish and further expand its regional leadership, especially in Southwest China and Northwest China.

According to the Market Research Report, the group is the largest sportswear brand in Yunnan, Chongqing, Shaanxi, Heilongjiang and Tibet, according to the number of retail outlets operated directly or through distributors.

According to the Market Research Report, from 2003 to 2007, the estimated annual compound annual growth rate of the brand sports apparel market was 27%.

As of the last practicable date, 24 distributors of the product have set up 3060 retail outlets.

The retail store specializes in group products and does not display or sell other brand products.

In December 31, 2007, there were 955 direct distributors operated by distributors in the 2519 hi tech retail stores. The authorized number of third retailers was 1564.

Its retail network covers 26 provinces and cities in China.

There is no self owned or self operated retailer, and only contracts with distributors, but it has nothing to do with the authorized third party retailers.

The product is manufactured by internal production department and external manufacturer.

Xi long in Jinjiang, Fujian Province set up production facilities to manufacture shoes products.

The production facility covers an area of about 66102 square meters, equipped with seven production lines, with an annual capacity of about seven million pairs.

Fund-raising purposes; at a median price of 1.68 yuan, the net capital contribution is 600 million 800 thousand yuan, of which about 33% are used as brand promotion and promotional activities, about 24% for expanding sales networks, about 15% for expansion of production facilities and acquisition of production equipment, about 6% for upgrading information management systems, about 15% for long R & D expenditure, and about 7% for operational expenses.

According to the prospectus, the growth rate of net profit in the 2005-07 year is 2.05 times that of 14 million 480 thousand, 67 million 840 thousand and 135 million yuan respectively. The company forecasts 08 yuan profit of 0.1618 yuan per share, and the 1.38-1.98 <01368.HK> price is equal to the forecast price earnings ratio 8.5 to 12.2 times. For the share price of XTEP international <01368.HK>, which is the same industry, the attraction of the company's current valuation is limited, and the current market conditions are quite fluctuant.

<00977.HK> rating: prudence

Name of stock: Xi long long

Stock Code: 00977

Main business: sports shoes and apparel chain group

Price range: HK $1.38 to $1.98.

2000 units for each trading unit

IPO day: June 27, 2008 to July 3, 2008

Listing date: July 11, 2008