Explore PEAK XTEP Again Stock Surge Is Still Expanding Production Situation

August, 16 and 17, China's local movement

In addition to the capacity of Quanzhou in Fujian, XTEP plans to set up about 3 million pairs of shoes production bases in Hunan Province, and is expected to be put into operation by the end of 2011.

In addition, XTEP will add new factory buildings in Anhui Province, and is expected to be put into operation in 2013.

Another brand PEAK also announced in the China Daily that it will invest 80 million yuan in the second half of 2011, and continue to build two existing production facilities and purchase new machinery and equipment in Shanggao County, Fujian Huian and Jiangxi.

After the production of Shanggao County workshop in Jiangxi province is fully put into operation at the end of 2012, the annual output of PEAK footwear products will increase to about 15 million 700 thousand pairs.

After the completion of the workshop in Huian County of Fujian province at the end of 2013, the annual output of PEAK's clothing products will increase to 18 million 700 thousand.

In the first half of, the total output of footwear in the first half of the year was 12 million 300 thousand pairs, of which 48% produced by itself, and 52% contracted out in contract manufacturing; 2011.

In addition, due to the shortage of labor in China's coastal areas, PEAK plans to build another clothing production facility in Heze, Shandong. The total capital expenditure is expected to be 1 billion yuan. The related construction works are expected to start in 2012 and will take at least three years to complete.

In stark contrast, XTEP's inventory rose by 157.9% to 887 million yuan in the first half of 2011, and the inventory of finished goods was as high as 474 million yuan, 5.46 times that of the end of last year.

Inventory remained high. Meanwhile, XTEP's net operating cash inflow was negative 335 million yuan in the first half of this year.

PEAK's inventory in the first half of 2011 was 409 million yuan, up 41% over the same period last year, and net cash flow from operating activities decreased from 471 million yuan in the first half of 2010 to 130 million yuan, a drop of 68.22%.

According to the latest reports of XTEP and PEAK, the two medium-term income and gross profit margin of the two or three companies have increased steadily, and the main marketing focuses on the two or three line cities.

Haitong international analyst Wang Jingwen told reporters that the growth of China's sporting goods industry is slowing down. At present, the competition among brands is fierce. The key to winning the battle will depend on the brand.