Xi De Long: Aststock Rating "Prudent"

The name of the shares is 00977. The main business sport shoes and clothing chain group's stock price range is HK $1.38 to 1.98 yuan, 2000 units per hand trading unit, the date of public offering from June 27, 2008 to July 3, 2008, July 11, 2008, the closing date of application is announced in July 3, 2008, and 500 million shares are planned (public offering and placement respectively account for 10% and 90%), of which 100 million shares are old stocks, and the stock price is between 1.38-1.98 yuan, 2000 shares per hand and entrance fee 3999.96 yuan.

The scale of financing was 6.9-9.9 billion yuan, which was publicly subscribed in June 27th, closed at 12 noon on July 3rd, and listed on July 11th, 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 running shoes, casual shoes, basketball shoes, skateboard shoes and canvas shoes; (II) clothing, mainly including sports tops, sports pants, jackets, sports suits and coats, and (III) accessories, mainly including bags, socks, hats and duck tongue 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. The retail price of sports and casual shoes is set at an average of 200 yuan to 300 yuan per pair.

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.

Cautious rating.