China Xiniya Fashion (NYSE:XNY)

First Quarter 2013 Financial Results:

• Revenue in the first quarter of 2013 increased by 4.2% to RMB221.2 million, as compared to RMB212.3 million in the first quarter of 2012, which is within the prior guidance of 1%-5%.
• Gross margin was 30.7% in the first quarter of 2013 as compared to 34.1% in the first quarter of 2012. 
• Profit before taxation in the first quarter of 2013 declined by 19.9% to RMB46.4 million as compared to RMB57.9 million in the first quarter of 2012.
• Net profit in the first quarter of 2013 declined by 23.1% to RMB33.2 million as compared to RMB43.2 million in the first quarter of 2012.
• Earnings per ADS were $0.09 in the first quarter of 2013 as compared to $0.12 per ADS in the first quarter of 2012, which is within the prior guidance of $0.05-$0.09 per ADS.

• In order to improve sales performance in Inner Mongolia and Hebei provinces, the Company is going to reorganize its distribution system in these two provinces and consolidate their management under the distributor in Beijing. The Company and its existing distributors in Inner Mongolia and Hebei provinces mutually agreed to cease their business relationship immediately after these distributors fulfill their obligation to distribute the 2013 spring and summer collections to the authorized retailers. The Company has put in place transitional arrangements for the distributor in Beijing to take over the distribution of Xiniya branded products in Inner Mongolia and Hebei provinces. Its distributor in Beijing will be responsible for the delivery of the 2013 fall and winter collections and beyond. As of March 31, 2013, the Company had 42 and 41 authorized retail outlets in Inner Mongolia and Hebei provinces, respectively.

Guidance

• Revenue in RMB for the second quarter of 2013 is expected to be in the range between -4% to +1%.
• Earnings per ADS in the second quarter of 2013 are expected to be in the range between -$0.03 to +$0.01.

"We expect China's economic softening will continue to affect consumer demand for apparel in China in 2013," commented Mr.Qiming Xu, Xiniya's Chairman and Chief Executive Officer. "The aggressive discounting offered by other menswear brands has exacerbated the situation in the near-term and reduced the profitability of our authorized retailers. The challenges faced by our authorized retailers is affecting the confidence of our distributors and authorized retailers, which may in turn lead to declining orders to be placed with us. The enthusiasm generally exhibited by our partners in opening new retail outlets and the willingness to maintain existing ones has softened. While this sentiment has impacted our bottom line, I believe the impact will be temporary and that we will eventually benefit from our strategy that focuses on adapting our business to an ever changing retail landscape.

"In order to adapt to these challenging conditions, we will continue to implement our shop rack subsidy initiative to retain our existing retailers as well as attract prospective retailers to join us. This has been further supported by initiatives put in place to expand the store size of our existing authorized retail outlets. We also reduced the recommended retail prices of our 2013 Spring and Summer Collections by approximately 2% so that our products are more price competitive with those of our competitors. Furthermore, we will continue to support our distributors by increasing our sales rebates and extending the credit period from 30 to 90 days to 30 to 120 days for all our distributors in 2013. We are confident that we will be able to overcome these short-term challenges and that these initiatives will provide the necessary support that our distributors and authorized retailers need as we continue to pursue long-term sustainable growth."

Fourth Quarter 2012 Results

• Revenue in the fourth quarter of 2012 increased by 10.3% to RMB532.5 million, as compared to RMB482.8 million in the fourth quarter of 2011, which exceeded the prior guidance of 4%-7%.
• Gross margin was 32.3% in the fourth quarter of 2012 as compared to 35.1% in the fourth quarter of 2011.
• Profit before taxation in the fourth quarter of 2012 declined by 50.1% to RMB74.8 million as compared to RMB150.0 millionin the fourth quarter of 2011.
• Net profit in the fourth quarter of 2012 declined by 50.6% to RMB55.6 million as compared to RMB112.5 million in the fourth quarter of 2011.
• Earnings per ADS were $0.16 in the fourth quarter of 2012 as compared to $0.31 per ADS in the fourth quarter of 2011, and were below prior guidance of $0.17-$0.19 per ADS.

Guidance

• Revenue in RMB for the first quarter of 2013 is expected to increase by 1%-5%.
• Earnings per ADS in the first quarter of 2013 are expected to be in the range of $0.05 �$0.09.

"Our strong revenue growth continued during the fourth quarter of 2012 as a result of the increased sales volumes from our expansion strategy," said Mr. Qiming Xu, Chairman and Chief Executive Officer of Xiniya. "The softening Chinese economy in 2012 posed significant challenges to Xiniya, our distributors and authorized retailers as well as our competitors. The slower pace of growth affected consumer sentiment creating challenges for menswear retailers as China's consumer tastes became increasingly more sophisticated and price sensitive. As a result, the aggressive discounting offered by other menswear brands to clear the industry wide buildup of inventory created further challenges. Faced with these challenges, we implemented numerous initiatives over the past year to strengthen our competitiveness. These included conducting training courses for our distributors and authorized retailers to strengthen retail management and enhance profitability as the refurbishment of our existing outlets continues, expanding existing outlet floor space, and implementing multi-level advertising and promotional campaigns for authorized outlets across 20 provinces in China. In an effort to improve the price competitiveness of our products, we have continued to reduce the retail prices of our spring and summer collections in 2013. While this reduces Xiniya's gross margin, we plan on increasing the sales rebates given to our distributors to provide further financial support during the slowdown. We believe that these challenges will remain in the short-term, but our initiatives will enable us to overcome them in the long-term as we strengthen our competiveness and diligently work on our expansion strategy

Third Quarter 2012 Highlights

• Revenue in the third quarter of 2012 increased by 15.7% to RMB417.9 million, as compared to RMB361.1 millionin the third quarter of 2011, which exceeded the prior guidance of 8%-11%.
• Gross margin was 34.5% in the third quarter of 2012 as compared to 34.4% in the third quarter of 2011.
• Profit before taxation in the third quarter of 2012 declined by 21.1% to RMB74.8 million as compared toRMB94.8 million in the third quarter of 2011.
• Net profit in the third quarter of 2012 declined by 21.4% to RMB56.4 million as compared to RMB71.8 million in the third quarter of 2011.
• Earnings per ADS were $0.16 in the third quarter of 2012 as compared to $0.19 per ADS in the third quarter of 2011, and exceeded prior guidance of $0.09-$0.11 per ADS.

Guidance

• Revenue in RMB for the fourth quarter of 2012 is expected to increase by 4%-7%.
• Earnings per ADS in the fourth quarter of 2012 are expected to be in the range of $0.17 -$0.19.
• The Company reiterates guidance for net additions of retail outlets for 2012 to be more than 100.

"On the back of continued store expansion and the rapid conversion of our authorized retailer- managed retail outlets, we were able to beat guidance with another strong quarter of top line revenue growth," said Mr. Qiming Xu, Chairman and Chief Executive Officer. "Despite the economic softening in China, we were able to adapt to the current situation and push through numerous initiatives we have put in place to ensure the long-term, sustainable development of our business. Following our bi-annual sales fair in September 2012, where the total value of purchase orders grew slightly despite distributors' and authorized retailers' cautionary approach, we reduced the prices on our collections to improve the price competitiveness of our products, improve product turnover and reduce inventories during the slowdown. We conducted training courses for distributors and authorized retailers to strengthen retail management and enhance profitability as the refurbishment of our existing retail outlets continued as we adjust our image to meet changing consumers taste. We are pleased with the flexibility we have shown during the quarter as we push through these difficult times. I remain confident in our ability to seek new growth opportunities as we enhance our brand value and provide our customers with the high-quality products they have come to expect."

Second Quarter 2012 Highlights

• Revenue in the second quarter of 2012 increased by 24.9% to RMB220.9 million, as compared to RMB176.9 million in the second quarter of 2011, which exceeded the prior guidance of 19%-21%.
• Gross margin was 33.0% in the second quarter of 2012 as compared to 32.4% in the second quarter of 2011.
• Profit before taxation in the second quarter of 2012 declined by 39.1% to RMB28.3 million as compared to RMB46.5 million in the second quarter of 2011.
• Net profit in the second quarter of 2012 declined by 42.9% to RMB20.2 million as compared to RMB35.4 million in the second quarter of 2011.
• Earnings per ADS were $0.06 in the second quarter of 2012 as compared to $0.09 per ADS in the second quarter of 2011, and exceeded prior guidance of $0.03-$0.04 per ADS.
• Xiniya's network of authorized retailers had a net addition of 43 new retail outlets in the second quarter of 2012, consisting of 60 new retail outlets opened and 17 retail outlets closed, bringing the total number of authorized retail outlets to 1,659 as of June 30, 2012.
• As of June 30, 2012, the Company, Mr. Qiming Xu - Xiniya's Chairman and Chief Executive Officer, and Mr.Chee Jiong Ng - Xiniya's Chief Financial Officer, have purchased, through the public market pursuant to a written plan, an aggregate of $1,080,161, $120,021 and $30,003 worth of ADSs, respectively, or 570,723, 63,435 and 15,870 ADSs, all at an average price of $1.89, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Guidance

• Revenue in RMB for the third quarter of 2012 is expected to increase by 8%-11%.
• Earnings per ADS in the third quarter of 2012 are expected to be in the range of $0.09 -$0.11.
• Net additions of retail outlets for 2012 are expected to be more than 100.

"Driven by our continued revenue and store growth, our second quarter financial and operational performance came in ahead of guidance," said Mr. Qiming Xu, Chairman and Chief Executive Officer. "Throughout the second quarter, we invested heavily in our future growth through a series of initiatives and our licensing transaction. To support future outlet expansion and the implementation of our ERP system, we increased the administrative head count at our headquarters in Xiamen and renewed our successful advertising campaigns on various CCTV channels in support of our brand equity and new collections. We are particularly pleased with the licensing agreement with Guangzhou Shuochen Clothing Development Co., Ltd which will aid in increasing our retail network and brand recognition over the long term. These initiatives will require time to bear fruit, but will provide us with additional avenues of growth as we look forward to the second half of 2012."

XIAMEN, China, August 2, 2012 /PRNewswire-Asia/ -- China Xiniya Fashion Limited ("Xiniya" or the "Company" NYSE:XNY), a leading provider of men's business casual apparel in China, yesterday discussed the Company's outlook for a proposed new production facility that will be constructed in Jinjiang City, Fujian Province.

In an interview with Chinese media yesterday, Mr.Jianeng Pan, Assistant to the Chairman, provided an update to Xiniya's plans for the new manufacturing and logistic facilities. He said that the Company is awaiting approval from the government to acquire land use rights for the facilities. The budget for the facilities, including the land use rights, is expected to be approximately RMB600 million (or approximately US$94 million). He added that the facilities will be built in several phases over the next five years (assuming the Company obtains government approval for the land use rights) and that construction is expected to be funded with the proceeds from the IPO and internally generated cash.

Projected to be built on 74 acres of land, the Mr.Pan said that the Company's goal for the proposed new facilities is to provide the Company with 30 to 40% of its total production needs and act as a logistics distribution center.

XIAMEN, China, July 11, 2012 /PRNewswire-Asia/ -- China Xiniya Fashion Limited ("Xiniya" or the "Company") (NYSE: XNY), a leading provider of men's business casual apparel in China, announced its agreement to grant an exclusive license to Guangzhou Shuochen Clothing Development Co., Ltd. (the "Licensee") to use the registered Xiniya brand for designing, developing, marketing and selling leather shoes, bags and other goods through specialty retail outlets, including department store concessions in China, with effect from August 1, 2012 to November 30, 2018.

The scope of the license is limited to business casual leather products, excluding existing Xiniya menswear products and non-business casual leather products. These licensed products may not be sold by the Licensee over the internet or through Xiniya's existing distribution and retail channels. Xiniya will retain final design approval over products developed by the Licensee.

By the end of the license term, the Licensee is expected to have opened in tier one, two and three cities in China at least 300 retail outlets and/or concessions that exclusively display and sell Xiniya business casual leather products.

"We are very pleased to have signed this agreement with Guangzhou Shuochen Clothing Development Company," said Mr. Qiming Xu, chairman and chief executive officer of China Xiniya Fashion Limited. "With over 10 years of experience in leather goods development and production, Shuochen is an ideal partner. While this will have no immediate impact on our financial results, we believe that this will help to increase our retail network and brand recognition over the long term as we continue to grow our brand."

First Quarter 2012 Highlights

• Revenue in the first quarter of 2012 increased by 33.3% to RMB212.3 million, as compared to RMB159.3 million in the first quarter of 2011, which exceeded the prior guidance of 23%-28%.
• Gross margin was 34.1% in the first quarter of 2012 as compared to 33.6% in the first quarter of 2011.
• Profit before taxation in the first quarter of 2012 increased by 35.0% to RMB57.9 million as compared toRMB42.9 million in the first quarter of 2011.
• Net profit in the first quarter of 2012 increased by 34.6% to RMB43.2 million as compared to RMB32.1 millionin the first quarter of 2011.
• Earnings per ADS were $0.12 in the first quarter of 2012 as compared to $0.08 per ADS in the first quarter of 2011, and exceeded prior guidance of $0.04-$0.09 per ADS.
• Xiniya's network of authorized retailers had a net addition of 9 new retail outlets in the first quarter of 2012, consisting of 23 new retail outlets opened and 14 retail outlets closed, bringing the total number of authorized retail outlets to 1,616 as of March 31, 2012.
• As of March 31, 2012, the Company, Mr. Qiming Xu - Xiniya's Chairman and Chief Executive Officer, and Mr.Chee Jiong Ng - Xiniya's Chief Financial Officer, have purchased, through the public market pursuant to a written plan, an aggregate of $787,500, $87,500 and $21,875 worth of ADSs, respectively, or 389,032, 43,244 and 10,823 ADSs, all at an average price of $2.02, in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

Guidance

• Revenue in RMB for the second quarter of 2012 is expected to increase by 19%-21%.
• Earnings per ADS in the second quarter of 2012 are expected to be in the range of $0.03 -$0.04.

"We are pleased to report solid results for the first quarter of 2012," said Mr. Qiming Xu, Chairman and Chief Executive Officer of China Xiniya Fashion Limited. "Our solid financial and operational performance came in ahead of expectations, and were mainly driven by our strengthening brand equity and retail outlet expansion. We once again delivered ahead of our stated revenue guidance. The results from our sales fair held last month in Chengdu, Sichuan Province recently came in with an 11% increase in total order value over last year. We believe this solid performance is directly related to the strength of our fall and winter collection. We are excited at the growth opportunities such a strong collection will provide over the next six months. Looking ahead, we will continue to execute our strategic objectives to add to our foundation for sustainable growth."

Fourth Quarter 2011 Highlights

• Total revenue in the fourth quarter of 2011 increased by 44.7% to RMB482.8 million, as compared toRMB333.6 million in the fourth quarter of 2010. The increase was significantly above the prior guidance of 25%-30%. Approximately 7%, or RMB23.3 million, of the increase in revenue was attributed to goods-in-transit recorded during the third quarter of 2011 which were delivered and recognized in the fourth quarter of 2011.
• Gross margin was 35.1% in the fourth quarter of 2011-exceeding prior guidance of 34%-35%.
• Profit before taxation in the fourth quarter of 2011 increased by 35.4% to RMB150.0 million as compared toRMB110.8 million in the fourth quarter of 2010.
• Net profit in the fourth quarter of 2011 increased by 16.1% to RMB112.5 million, with an effective tax rate of 25% in the fourth quarter of 2011, as compared to a 12.6% tax rate in the fourth quarter of 2010 due to expiration of China's preferential tax treatment at the end of 2010.
• Earnings per ADS were $0.31 in the fourth quarter of 2011-exceeding prior guidance of $0.21-$0.25 per ADS.
• Xiniya's network of authorized retailers added 40 new retail outlets in the fourth quarter of 2011, bringing the total number of authorized retail outlets to 1,607, as compared to 38 new retail outlets added in the fourth quarter of 2010.

Guidance

• For the first quarter of 2012, revenue in RMB is expected to increase by 23%-28%.
• Earnings per ADS in the first quarter of 2012 are expected to be in the range of $0.04 -$0.09.

Mr. Qiming Xu, Chairman and Chief Executive Officer, commented, "We are pleased to report another strong quarter and solid full-year financial and operational results. We concluded our first year as a public company having achieved many of the accomplishments we set out for ourselves. Most importantly, we delivered on our stated revenue and gross margin guidance while we strengthened our brand equity though investments in marketing and advertising. Our advertising campaigns on CCTV-2, CCTV-5 and CCTV-12 were particularly successful along with the opening of our new flagship store in Quanzhou, Fujian Province in November 2011. I am very optimistic about Xiniya's business momentum as we execute on our strategic objectives in 2012 to build the foundation for a sustainable growth plan during the current year and beyond."

Third Quarter 2011 Results

Second Quarter 2011 Results

• Total revenue in the second quarter of 2011 increased by 30.4% to RMB176.9 million————at the high-end of prior guidance of 27%-30%————as compared to RMB135.6 million in the second quarter of 2010.
• Earnings per ADS were $0.09 in the second quarter of 2011, which was at the high end of the prior guidance of $0.07-$0.09 per ADS but down from $0.10 in 2010 second quarter.

First Quarter 2011 Highlights

• Total revenue in the first quarter of 2011 increased by 30.1% to RMB159.3 million - at the high-end of prior guidance of 29%-30% - as compared to RMB122.4 million in the first quarter of 2010.
• Gross margin was 33.6% in the first quarter of 2011, compared to 32.5% in the first quarter of 2010; a 19.2% increase in average selling price ("ASP") fully offset the increase in materials and labor costs.
• Profit before taxation in the first quarter of 2011 increased by 16.9% to RMB42.9 million as compared to RMB36.7 million in the first quarter of 2010.
• Net profit in the first quarter of 2011 increased by 1.5% to RMB32.1 million. The magnitude of this growth was adversely impacted by the increase in the Company's tax rate to 25% in 2011 from an effective tax rate of 12.6% in 2010, due to the expiration of the Company's preferential PRC tax treatment at the end of 2010.
• Earnings per ADS were $0.08 in the first quarter of 2011, which was within the range of the prior guidance of $0.08-$0.09 per ADS.
• Xiniya's network of authorized retailers added 42 new retail outlets in the first quarter of 2011, as compared to 35 new retail outlets added in the first quarter of 2010. In 2010, 39% of the new stores for the year were opened in the first half of the year, while 61% of the new stores were opened in the second half.

Guidance

• The Company reiterates its guidance for the first half of 2011. Revenue in RMB is expected to increase by 27%-30%, and gross margin is expected to be in the range of 32%-33%, compared with 31.9% in the first half of 2010.
• Following a successful bi-annual sales fair held in April 2011, revenue in RMB in the second half of 2011 is expected to increase by 24%-29%, and gross margin is expected to be in the range of 34%-35%, compared with 35.5% in the second half of 2010.
• For the full year of 2011, revenue in RMB is expected to increase by 24%-29%, and gross margin is expected to be in the range of 34%-35%, compared with 34.5% for the full year of 2010.
• Earnings per ADS in the second quarter of 2011 are expected to be in the range of $0.07-$0.09 compared to $0.10 in the second quarter of 2010, due to the expiration of the Company's preferential PRC tax treatment at the end of 2010. Xiniya's tax rate increased to 25% beginning in 2011 versus an effective tax rate of 12.6% in 2010. If earnings per ADS for the second quarter of 2010 were subject to a 25% tax rate, the earnings per ADS would have been $0.08.
• As previously reported, Xiniya plans to increase the total number of retail outlets managed or authorized by its distributors by approximately 180 to 220 in 2011.

Mr. Qiming Xu, Chairman and Chief Executive Officer, commented, "We are pleased to report solid results for the start of 2011. Our sales momentum is continuing as we dedicated more resources to marketing and advertising to support the Xiniya brand. The promotional efforts of our spokesperson, Jacky Cheung, and our partial sponsorship of his 'Half Century' concert tour, coupled with our first national television campaign as a public company on two of China's leading national channels, helped to propel impressive results during the quarter.  Xiniya's ongoing sales momentum was evidenced by the 29% sales increase at our most recent bi-annual sales fair held in April. Our brand remains vibrant and we expect to continue to deliver solid results for the rest of the year."

JINJIANG, Fujian, China, June 7, 2011 /PRNewswire-Asia/ -- China Xiniya Fashion Limited (NYSE: XNY), (or "Xiniya"), is pleased to announce that the total order value of 2011 April sales fair surged by 29% as compared to last year.  This stellar performance is mainly attributable to the double-digit growth of both average selling price and sales volume.  Orders for suits, jackets, T-shirts, casual shirts, coats, accessories and shoes were particularly strong. These orders are expected to be delivered from July 2011 to December 2011 / January 2012.  

"We are pleased by the strong acceptance of the Xiniya brand at the April sales fair following a very strong sales fair that was held last September. The brand has a great deal of sales momentum thus far in 2011 and we attribute the strength to our talented design team. We have also dedicated more resources to targeted marketing and advertising programs which has well-positioned the Xiniya brand in the market," said Qiming Xu, chairman and chief executive officer.

Fiscal Year 2010 Highlights

• Total revenue in 2010 increased by 33.8% year-over-year to RMB899.3 million ($136.3 million) - at the high-end of prior guidance of RMB880 million to RMB900 million.
• Gross profit margin was 34.5% in 2010 compared to 34.7% in 2009; a 21.6% increase in ASP helped to offset the increase in materials and labor costs.
• Net profit increased 29.8% year-over-year to $38.5 million compared with $29.6 million in 2009.
• Earnings per ADS increased by 27.1% year-over-year to $0.75 per ADS in 2010.
• Non-IFRS earnings per ADS (excluding share-based compensation expenses) increased by 28.8% year-over-year to $0.76 per ADS in 2010.

Xiniya added 223 new retail outlets opened by its network of authorized retailers, which was higher than the original planned increase of 180-200 new outlets.

Guidance

• Following a successful bi-annual sales fair held in September 2010, first quarter 2011 revenue in RMB is expected to increase by 29%-30% compared to the first quarter of 2010. Gross margin in the first quarter of 2011 is expected to range between 33%-34% versus 32.5% in the first quarter of 2010.
• Earnings per ADS are expected to be in the range of $0.08-$0.09 compared to $0.09 in the first quarter of 2010, due to the expiration of the Company’s preferential PRC tax treatment at the end of 2010. Xiniya’s tax rate will increase to 25% from 2011 onwards versus a rate of 12.6% in 2010.
• Revenue in RMB in the first half of 2011 is expected to increase by 27%-30% and gross margin is expected to be in the range of 32-33% compared with 31.9% in the first half of 2010.
• Xiniya plans to increase the number of retail outlets managed or authorized by its distributors by approximately 180 to 220 in 2011.
• Through February 2011, Xiniya’s network of authorized distributors added 28 new retail stores compared to 24 stores added in the first two months of 2010. As of March 28, 2011, a total of 41 new retail stores have been added, compared to 35 new stores added in the first three months of 2010. In 2010, 39% of our new stores for the year were opened in the first half of the year, while 61% of the new stores were opened in the second half.

Mr. Qiming Xu, Chairman and Chief Executive Officer, commented, "After our successful listing on the New York Stock Exchange last November, I am pleased to announce our strong operating performance for the year ended December 31, 2010. Our business casual assortment was well received in the marketplace and was the main driver behind our solid sales growth for the year. Going forward, we expect continued growth in the first half of 2011 and continued momentum during the year as we will be allocating more resources towards our marketing activities. We are strengthening our brand to position ourselves for long-term growth and become one of the leading menswear brands in China."

JINJIANG, Fujian, China, Jan. 3, 2011 /PRNewswire/ -- China Xiniya Fashion Limited today provided an update on its business for the year ended December 31, 2010.

During the year, the Company added 223 new retail outlets opened by Xiniya authorized retailers, up from the original planned increase of 180 to 200 new retail stores for 2010. As a result, Xiniya's total number of authorized retail outlets reached 1,404 authorized retail stores as of December 31, 2010, up from 1,181 at the end of 2009.

With the contribution of these new outlets, Xiniya expects full year 2010

• revenues to range between RMB 880 million to RMB 900 million, or about $131.5 million to $134.5 million
• with a gross profit margin at a similar level to that of 2009, between 34% and 35%.

On November 23, 2010 China Xiniya Fashion Completed its Initial Public Offering

Company Snapshot:

A leading provider of men’s business casual apparel in China.

Industry Snapshot:

With approximately one-fifth of the world’s population and a fast-growing gross domestic product, or GDP, China represents a significant growth opportunity for a wide variety of retail goods, including apparel. The enhanced living standards and increased disposable income that has resulted from the vibrant economic growth has driven the rapid development of the men’s apparel market in China in recent years. China is currently one of the world’s largest men’s apparel markets and it is larger than the U.S. market based on retail sales of men’s apparel products in 2009. As a leading provider of men’s business casual apparel in China, we believe we are well positioned to capitalize on the favorable economic, demographic and industry trends in this sector.

Use Of proceeds: 

• approximately $18.0 million to construct new manufacturing facilities in China that will increase our production capacity and also enhance quality control and process standardization of our products;

• approximately $18.0 million to enhance the scale and frequency of our marketing and promotional campaigns; 

•  approximately $10.0 million to open flagship stores in China;

• approximately $10.0 million to establish dedicated research and development and sales and marketing centers;

• approximately $8.0 million to develop new products, including establishing a sub-brand targeting younger customers between the ages of 20 and 30;

• approximately $7.0 million to upgrade our data management systems, including rolling out an enterprise resource planning system, or ERP system;

•  the remaining amount to fund our working capital and for other general corporate purposes, including product launches and new store launches.
  

Underwriter:

• Cowen and Company
• Samsung Securities (Asia) Limited
• Lazard Capital Markets
• Janney Montgomery Scott

Offering price: $11.00 (Proposed offering range: $9.00 to $11.00) 

Post IPO Share Calculation: (Using a 4 to 1 Ordinary to ADS conversion ratio).

• 48,416,666: Pre IPO fully diluted share count used in EPS calculation.
•   8,000,000: Newly issued ADS shares
• 1,200,000 : Underwriter Over-allotments ADS shares offered by current shareholders

GeoTeam® best effort calculation of total post IPO ADS count to be used in EPS calculations, assuming full conversions and a Ordinary to ADS conversion ratio of 4 to 1:   57,616,666

Financial Snapshot: (December Year)

2009 vs. 2008

• Revenues: $93.0 vs. $61.5 million
• Net income: $29.0 vs. $18.8 million

Nine Months 2010 vs. 2009

• Revenues: $84.6 vs. $62.0 million
• Net income: $23.2 vs. $16.7 million

Pro Forma Valuation: using offering price and new share count

• Trailing EPS (ADS): $0.61
• Trailing P/E: 18.0