Ding Shui Po, Chairman and CEO of Xtep (right) and Yeung Ka Sing, Chairman and Executive Director of Birmingham International, seal the kit deal.  Photo: Xtep

XTEP HAS OFFICIALLY ARRIVED on the international stage.

Its signing today of a deal to sponsor the uniforms of the English Premier League’s hottest team – the Birmingham City Football Club – marks a milestone for both Xtep International Holdings Ltd (HK: 1368) and China as it marks the first time a PRC-based sportswear firm has won such a deal with the League.

At a signing ceremony today in the eastern Chinese city of Hefei, Xtep – China’s leading fashion sportswear enterprise unveiled the five-year kit sponsorship agreement with Birmingham International Holdings Ltd (HK: 2309), under which Xtep will supply apparel to the Birmingham City Football Club.

And Xtep could not have chosen a team with more momentum as Birmingham City currently enjoys, as the club has been unbeaten in 14 consecutive matches, a record not achieved since 1908!

Birmingham City FC, coached by ex-Scotland manager, Alex McLeish, has an unbeaten record stretching back to October 24, 2009.

During these 14 matches, they drew with leading football clubs like Manchester United, Chelsea and Liverpool and won against Blackburn Rovers, West Ham United, Fulham and many others.

The kit sponsorship agreement between Xtep and BCFC will be in effect from August 2010 to May 2015, with the sponsorship fee for the entire period amounting to 90 mln hkd in aggregate.

As part of the agreement, Xtep will also supply to Birmingham International approximately 10 mln hkd net worth of sportswear products bearing the joint “Xtep-BCFC” logo during the five year contract period.

As the first PRC sportswear brand to sponsor an English Premier League football team, the tieup also marks a major milestone for the group as it propels the fast growing young fashion sportswear brand onto the global arena.
Yeung Ka Sing, Chairman and Executive Director of Birmingham International, at the signing ceremony.
Photo: Xtep

"We are delighted to secure this opportunity to promote our Xtep brand and establish a presence in the international market. The Barclay Premier Football League is one of the most popular and most-watched football leagues in the world, followed by over half a billion people in 202 countries!” said Xtep Chairman and CEO Mr. Ding Shui Po.

Speaking at the signing ceremony, Mr. Ding pointed to rich football history and current white-hot streak.

"We are confident that Birmingham City FC will go on to scale greater heights in the future and bring the Xtep brand even wider exposure internationally,” he added.

Mr. Ding said Xtep will roll out a series of Xtep-BCFC apparel products which will be available for sale through the company’s retail network in China.

"With the support from Birmingham City FC, we are optimistic that the Xtep-BCFC merchandise will receive positive feedback from consumers in the PRC market. This will coincide with our World Cup 2010 promotion campaign and it will definitely add more excitement to our marketing and promotion activities.”

Xtep 2008 2009(e) 2010(e) 2011(e)
Turnover (rmb) 2.87 bln 3.41 bln 4.15 bln 4.91 bln
Net profit 508.2 mln 610.4 mln 761.1 mln 918.5 mln
EPS (basic) 0.268 0.281 0.350 0.423
P/E ratio 16.3x 15.6x 12.5x 10.3x
PEG 0.21 3.37 0.51 0.50
Ex-net cash P/E 13.2x 12.6x 10.0x 8.0x
Yield 3.6% 2.8% 3.5% 4.3%
Price/book 3.6x 3.3x 2.9x 2.5x

Kit and Kaboodle

Mr. Yeung Ka Sing, Chairman and Executive Director of Birmingham International, was confident that Xtep would be a valuable partner for the English Premier League club.

"Xtep is the leading fashion sportswear brand in the PRC. It has already shown a strong commitment to sports development through sponsorship of many high profile events such as the Olympic Games and of the 11th National Games of China in 2009.”

He added that he is very excited to have the eye-catching logo adoring the club’s jerseys from the beginning of the 2010-2011 season.

"Our collaboration represents a win-win partnership. Xtep provides an excellent platform for us to bring our English Premier League team to the PRC market and promote the Birmingham City FC to a wider group of football fans in the PRC. We look forward to a long and fruitful relationship.”

Under the agreement, Birmingham City FC’s players and supporting staff will wear football outfits bearing Xtep’s logo during matches, training sessions and club events, thus giving Xtep maximum exposure.

Birmingham City FC will also support Xtep in various marketing and promotional activities, which include arranging for its players to participate in Xtep-BCFC promotional activities in China during the off-season.

In addition, eight mega advertising billboards bearing Xtep’s logo and products will be provided in BCFC’s football stadium, St Andrew’s Stadium, to maximize the marketing publicity.

Millions of fans are expected to watch the football games every week.

To further enhance the publicity in China, a minimum of eight matches that BCFC participates will be broadcasted by CCTV5. The Group expects tremendous marketing and promotion publicity for its Xtep brand on the international arena.


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