Recently, according to media reports:
Fengtai (9910), Nike’s main OEM shoe manufacturer, was affected by inventory adjustments by brand customers. The company’s net profit after tax for the first five months was 1.569 billion yuan, a year-on-year decrease of 57.4%, and net profit per share was 1.78 yuan.
Fengtai’s combined revenue in May was 6.734 billion yuan, a monthly decrease of 0.6% and an annual decrease of 18.1%; the consolidated revenue in the first five months was 32.876 billion yuan, an annual decrease of 15.1%.
Although shoemaking orders are still being adjusted, as customer inventories continue to be reduced, the legal person predicts that Fengtai’s capacity utilization rate will rebound slightly this quarter compared with the first quarter. As the supply of goods from major customer NIKE stabilizes, operations in the second half of the year It is expected to increase quarter by quarter, and Fengtai’s full-year net profit per share is expected to be 6 yuan this year.
The legal person pointed out that after two quarters of inventory reduction, NIKE’s inventory turnover days are close to normal levels. As inventory continues to decline, and with the order momentum gradually recovering, Fengtai’s revenue this quarter is expected to be better than that of the first quarter. However, because the speed of customer purchases has not yet returned to normal, the growth rate is only a low single-digit percentage.
Fengtai produced 135 million pairs of shoes last year, an annual increase of 13.7%. This year, due to the high inventory levels of major customers, recent operations have focused on reducing inventories. It is expected that the growth of Fengtai’s shipments will slow down. The annual production volume is estimated to be 125 million pairs, an annual decrease of approximately 7%.
The main customers of Fengtai sports shoes are NIKE, and the main customers of casual shoes and sports equipment footwear are Rockport, Tacnica, Bauer, Converse and Salomon.
Among them, NIKE accounts for 90% to 95%, and non-NIKE customers account for 5% to 10%.
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