Shui-Mu International Co Ltd (阿瘦實業), which markets and retails own-brand footwear in Taiwan, yesterday saw its shares climb more than 40 percent on their first day of trading on the Taiwan Stock Exchange (TWSE, 台灣證券交易所).
The company’s shares surged 43 percent to close at NT$57.2, from its listing price of NT$40, TWSE data showed.
Shui-Mu is the first footwear retailer in Taiwan to list on the TWSE, with the number of its shoe stores accounting for more than 30 percent of the nation’s footwear market.
Currently, the company operates about 250 shoe stores in Taiwan, offering footwear products under three own brands — A.S.O, BESO and effie — as well as various foreign brands. Various subcontractors in Taiwan sign with Shui-Mu to design and manufacture the company’s own-brand shoe products.
“Listing on the main bourse in Taiwan may help raise the company’s brand awareness and help the company attract more talent,” Shui-Mu chairman Joseph Lo (羅榮岳) told reporters after the company’s listing ceremony.
Instead of store expansion, Lo said the company would focus on boosting store quality, with more professionals in store management needed to keep service at the company’s stores on track.
Shui-Mu may enlarge the space of various stores by at least 50 percent over the near future, which may help it sell more related products, such as socks and bags, Lo said, adding that the company’s first new-style store is to open in Taipei’s Neihu District (內湖) on Thursday.
Shui-Mu posted net profit of NT$62.48 million (US$2.1 million), or NT$1.03 per share, in the first six months of the year, compared with NT$22.57 million, or NT$0.37 per share, recorded in the same period last year, according to the company’s stock exchange filing data.
Last year, the company posted net income of NT$72.96 million, or NT$1.21 per share, with annual consolidated sales standing at NT$3.22 billion, data showed.
SinoPac Securities Investment Service (永豐證券投資顧問) said Shui-Mu’s strategy to improve outlet quality may help maintain its profitability and raise gross margin this year, with consolidated sales to contract on its move to shut down non-profitable stores in China and quit the sporting shoes business.
However, in the long run, the nation’s footwear industry may see its sales momentum lower on the impact of market saturation, which caused the brokerage house to keep a relatively conservative attitude toward Shui-Mu’s stock performance.
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