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Shares of Chinese sportswear company Xtep International are plunging more than 15% in Hong Kong to hit HK$10.66, after sliding 6.5% on Tuesday.
The company’s average inventory turnover days increased sharply to 106 days in the first half of the year from 79 days in the same period last year, hitting the highest since 2008, according to its first-half earnings results.
Xtep reported first-half profit rose from a year ago on higher revenue. Its attributable profit jumped to 590.4 million yuan ($86.1 million), rising 38.4 from 421.7 million yuan a year ago. Earning per share was 0.23 yuan. Revenue rose by 37.5% on year to 5.68 billion yuan from 4.13 billion yuan a year earlier.
Xtep declared a dividend of HK$0.13 ($0.017) per share, payable Oct. 31 to shareholders as of Sept. 8.
Credit Suisse rate the stock Outperform as first-half earnings beat expectations, with target price set at HK$16.9.
