KINGHERO AG
KINGHERO AG: Strong profit margins in Q1 2011
KINGHERO AG / Key word(s): Interim Report 30.05.2011 / 07:54 - Record 33.9 % EBIT margin in Q1 2011 - Net profit grows by 38,3% to a record EUR 4.8 million in Q1 2011 - Flagship Stores contributing approx. 5% to revenues in Q1 2011 - 20 new high profile Flagship Store locations secured Munich, 30 May, 2011. KINGHERO AG, the German holding company of a fast-growing Chinese fashion company, looks back on a successful first quarter of 2011. Revenues increased by 22.2% from EUR 14.9 million in Q1 2010 to EUR 18.2* million (RMB 165.6 million) in Q1 2011. EBIT margin grew from 30.3% in Q1 2010 to 33.9% in Q1 2011. Revenues increased as a result of the high demand and rising prices for the KINGHERO casual wear series. The increase in demand is mainly due to the contemporary designs, the product variety and the successful strategic pricing of the products. Furthermore, the stronger brand visibility in connection with the new flagship stores also contributed to increased pricing power for the sale of high margin products, typical for Q1 of KINGHERO's business year. The gross profit in the seasonally high-margin first quarter increased by 40.1% to EUR 7.8 million (Q1 2010: EUR 5.5 million). The gross profit margin grew to 42.6% (Q1 2010: 37.0%). Operating profit (EBIT) amounted to EUR 6.2 million, which represents an increase of 37.1% compared to the first three months of 2010. The EBIT margin was up by 3.6 percentage points to 33.9%. Net profit reached EUR 4.8 million (Q1 2010: EUR 3.5 million), representing a net margin of 26.4%. After having opened the own first flagship store in August 2010, KINGHERO operated 10 stores at the end of Q1 2011. The flagship stores already contributed approx. 5% to revenues in Q1 2011 (Q1 2010: 0%) at superior gross margins. This effect led to an increase of the overall gross margin of approx. 1-2 percentage points. In sum, KINGHERO's retail network now comprises 387 retail outlets. For full year 2011, the management confirms the outlook to reach group sales of approx. EUR 105 million. This forecast does not include additional sales from 30 flagship stores that KINGHERO intends to open in 2011 with the proceeds of the capital increase. 'We are very confident that we can at least maintain the margins of 2010 and meet our growth targets. We will use the cash flow from operations and the additional proceeds of the just executed capital increase to raise the number of flagship stores to a total of 65 stores by the end of 2011. As of today, we have secured 20 ideal locations for new stores to be opened over the next months,' states Zhang Yu, CEO and founder of KINGHERO. For more information on KINGHERO's business and financial development in the first three months of 2011 please see the interim statement published on the website www.kinghero.de. *In our already published preliminary figures, sales amounted to EURO 18.5 million, because we used the average exchange rate RMB to EURO of 0.1118. In this final consolidated interim report we used the average exchange rate RMB to EURO of 0.1101. About KINGHERO AG KINGHERO AG is the German Holding Company of the KINGHERO Group of companies, mainly active in the Peoples Republic of China (PRC). The Group is a strongly growing apparel manufacturer and designer, featuring a leading Chinese fashion brand for the strongly growing urban middle class in China. The key to the Company's success is a high fashion degree with a European 'touch and feel' as well as an upscale quality. The high speed of the design and marketing of new collections ensures a fit to the changing demands of the growing urban middle class in China. Being in this business for more than 25 years, the group and its more than 1,000 employees produce attire for all seasons under the KINGHERO brand. The product portfolio includes suits, jackets, shirts, pants and sweaters for men and women and is divided into a business casual range and a general casual range. For further information please contact: Kirchhoff Consult AG Dr. Kay Baden Phone: +49 (0)40 60 91 86 0 baden@kirchhoff.de KINGHERO AG Montenstr. 11 80639 Munich Germany Phone: +49 (0)89 12 71 13 29 xiaoping.zhao-moll@kinghero.de Disclaimer This document is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States. The shares of KINGHERO AG (the 'Shares') have not been registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act') and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. There will be no public offering of the Shares in the United States and the Shares will not be registered under the Securities Act. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as 'relevant persons'). The Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. End of Corporate News --------------------------------------------------------------------- 30.05.2011 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: KINGHERO AG Montenstr. 11 80639 München Deutschland Phone: 089 - 127 11 329 Fax: 089 - 127 11 313 E-mail: contact@kinghero.de Internet: www.kinghero.de ISIN: DE000A0XFMW8 WKN: A0XFMW Listed: Freiverkehr in Düsseldorf, Hamburg, Stuttgart; Open Market (Entry Standard) in Frankfurt End of News DGAP News-Service --------------------------------------------------------------------- 126661 30.05.2011
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