MARK Ding Peng Peng, the controlling stakeholder and managing director of Xidelang Holdings Ltd (XDL), is a man with a mission - to change public perception of his company.
"First of all, we are not a shoe company. I don't know why the media here keeps referring us as a shoe maker. We are a sports apparel company," said Ding, who flew down from China early this week.
Indeed, data obtained from Bloomberg show that from 2009 t0 2010, XDL's sports apparel, accessories and equipment business grew by 61.37 per cent, while the sports shoes business fell by 0.88 per cent during the same period.
For the financial year ended December 31 2011, XDL's shoe business contributed RM225.79 million in sales, while the sports apparel, accessories and equipment contribued RM228.94 million in sales.
"Sports apparel, accessories and equipment contribute some 47 per cent to our revenue now, and this is expected to grow in the coming years," said Ding in an interview with Business Times.
He added that the original equipment manufacturer (OEM) of sports shoes for exports was another source of growth.
"Last year, the OEM for sports shoes for the export market brought in some RM46 million in sales," said Ding.
He added that the challenge ahead for XDL is to maintain its profitability as well as change the perception of the investing public.
"Let's face the fact. My company is valued in the market at about price- to-earnings (PE) of about two times.
"How many companies making a pre-tax profit of above RM100 million a year constantly have such low valuation?" said Ding.
He said the negative perception on China companies has played a key role, but feels that the investment public here has gone overboard.
"Even in Hong Kong, our bigger rival Anta Sports Products Ltd has a better valuation, trading at a PE of 9.8 times," said Ding.
For the record, XDL posted a pre-tax profit of RM117.50 million for the year ended December 31 2011, versus a pre-tax profit of RM106.77 million in the year before.
Read more: We're a sports apparel firm, not a shoemaker: Xidelang MD http://www.btimes.com.my/Current_News/BTIMES/articles/XIDEN/Article/#ixzz1nFggdPaN