Taiwan's Pou Sheng shakes off January scandal with solid March sales
Sportswear retailer sees shares soar on robust revenue, profit-taking limited
KEIICHIRO MORIYASU, NQN staff writer
HONG KONG -- Taiwanese sportswear retailer Pou Sheng International, a subsidiary of the world's largest contract footwear supplier Pou Chen, saw its share price jump following the announcement of robust consolidated monthly revenue for March.
Although profit-taking in Wednesday trading shaved off some of the gains, its share price soared as high as 11% on Tuesday, marking the first major rise since an accounting scandal surfaced in January.
The Hong Kong-listed Pou Sheng's net operating revenue in March was up 19% from a year before to 1.62 billion yuan ($230 million). Compared with last month, the increase was a staggering 44%. Although the company provided no details, net operating revenue for the first three months ended March was 4.67 billion yuan, up 15% from a year ago.
Following the announcement, the company's share price soared to 1.72 Hong Kong dollars by midday and closed at HK$1.70 on Tuesday. It traded on Wednesday slightly below the day before, after investors rushed to take profit. Shares closed on Wednesday at HK$1.69 down 0.6%.
The company's share price was hovering low since hitting a year high of HK$2.25 on Jan. 3. A dramatic shift came on Jan. 8 when the company said it had found "certain incorrect sales records" for the year ended December 2016. Shares dived as low as 37% the following day.
After the scandal broke, the sportswear retailer quickly reshuffled its management team, including firing the chief financial officer, which helped mitigate the effects of the scandal.
Pou Sheng International was founded through a spinoff from the same group Yue Yuen Industrial, which is also listed on the Hong Kong Stock Exchange. Its parent Pou Chen is the world's leading contract footwear supplier for Nike, Adidas and other global brands, and its shares traded in Taipei hit a year high of 43.95 New Taiwan dollars on Tuesday during midday trading as well. It closed 3% lower at NT$41.80 on Wednesday.
Pou Sheng operates as a sportswear retailer on the mainland, and also in Hong Kong and Taiwan, carrying popular brands including Nike, Adidas, Puma and Converse.
Nikkei staff writer Mariko Tai in Hong Kong contributed to this story.