KAPPA agents "China Trends" rose 36.4% on the first day of listing in Hong Kong

China Mobile Group (3818.HK), the largest IPO in China in Hong Kong’s sportswear company, was listed on the main board of Hong Kong yesterday. Like the previous subscription, it was sought after by investors and closed at HK$5.43, compared with the offer price. 3.98 Hong Kong dollar rose 36.4%.

The unique business model and the concept of the Olympic Games have become the two most popular selling points of the stock. The chairman of the company, Chen Yihong, expected to benefit from the Beijing Olympic Games when attending the listing ceremony yesterday. The overall growth of the sports goods industry in the mainland will reach 35% next year. He pointed out that the overall growth of the sporting goods industry in mainland China is an average of 20% each year. Next year's Beijing Olympic Games will increase sales by 10%-15%.

Chen Yihong had previously described that China’s net profit in 2006 increased by 200% compared with 2005, and its performance so far in 2007 has been more than 90% higher than the same period last year. The prospectus predicts that the company’s net profit for 2007 will be HK$633 million, and its basic earnings per share will be HK$0.11 (without taking account of the over-allotment option and exercise of the relevant share options).

Qin Dazhong, China's executive president and executive director, disclosed that during the "11 Golden Week," the company's sales had double-digit growth over the same period of last year. It is believed that sales growth for 2007 will exceed 90%.

China Dongxiang plans to expand its distribution network to 1800 companies this year and plans to open 300 stores in the second half of the year. Chen Yihong said that the company owns all rights of Italian brand KAPPA in the Mainland and Macau, and KAPPA is the third largest international sports apparel brand in China after Nike and Adidas, and it has more than 3,500 stores with Nike and Adidas in the Mainland. In comparison, there are at least 2,000 network expansion opportunities in China.