XiDeLang Holdings Ltd, a Bursa Malaysia Main Market-listed sports shoes company, announced that its wholly-owned subsidiary, HongPeng Fujian Shoes & Garments Co., Ltd (HongPeng Fujian) has signed a Memorandum of Collaboration with YeLi International Limited (YeLi International) that shall further strengthen its original design manufacturer (ODM) business, of which the company will be receiving ODM production orders from the signing party of not less than 210 million renminbi (equivalent to approximately RM133.8 million) in value for a period of 24 months.
HongPeng Fujian is a footwear and apparel manufacturing company with extensive internal capabilities and expertise on footwear product development and production management.
Its existing overseas clientele consist of multiple renowned international brands, which include ZARA, PULL & BEAR and DIADORA. It operates in a modernised eco-industrial park with a built-up area of approximately 82,000 square metres with an annual output value of exceeding 600 million renminbi.
Meanwhile, YeLi International specialises in high-end footwear product range, and is in possession of better brand resources and has a longer collaboration relationship with some of the renowned international footwear and sporting goods companies such as TEMPE SA (a subsidiary of Inditex Group) and INTERSPORT (the world’s largest sporting goods retailer).
Commenting on the signing of MOC, XiDeLang Group Managing Director and Chief Executive Officer Ding PengPeng said: “Through this strategic collaboration, YeLi will be receiving product development and technical support from HongPeng Fujian.”
This shall complement the strength of both parties and enhance the competitiveness of each other with regard to the business expansion and market penetration. YeLi International has also agreed to place ODM’s production orders of not less than 210 million renminbi in aggregate in the next 24 months.
He said the MOC is valid for a period of 24 months and shall serve as a framework agreement for both parties, adding that a separate agreement shall be entered into by both parties for any specific collaboration project or to set forth detailed collaboration terms and conditions.
“This partnership is expected to enhance our orderbook in the ODM business, which is another boost to our business just after our signing with Global Int’l Footwear (Hong Kong) Co., Ltd in May. According to the agreement with Global Int’l, the company shall place orders of not less than 160 million renminbi (equivalent to approximately RM99.23 million) in value over a period of 24 months for the ODM production,” he said.
XiDeLang Holdings Ltd is an investment holding company, whereby through its subsidiaries, the company is engaged in the design, manufacturing, and marketing of sports shoes within the People’s Republic of China. XiDeLang is also involved in the designing and marketing of sports apparels, accessories and equipment. For the financial year ended December 31, 2016, XiDeLang recorded a net profit of RM6.93mil and a revenue of RM503.83mil.