INVESTMENT OVERVIEW

Naibu is a significantly underrated sportswear manufacturer in China.

June 13 Accounts - Net cash of £41m exceeds the current market cap of £35m, Net Asset Value is £120m (£2.18 per share)

At the end of April 2013, the Company held its Autumn and Winter fair with distributors, the value of sales orders showed a 17.8% increase on the equivalent fair last year.

The Group achieved record half-year sales of RMB950.1 million (approximately GBP100.8 million), an increase of 20.5% over the same period in 2012. Pre-tax profits for the same period rose 16.1% to a record RMB214.8 million (approximately GBP22.8 million). EPS 2.9 RMB (30.8p)

http://uk.finance.yahoo.com/news/interview-chinese-outfit-naibu-global-135900100.html

http://www.brrmedia.co.uk/event/116535/giles-elliott-non-executive-deputy-chairman

2013 est. EPS 55.4p, Dividend 6p - Giving current P/E of 1.2x and a Yield of 9.2%.

Company broker Daniel Stewart rating - Buy - Target price of £2.

Results roadshow planned for week commencing 23rd September


COMPANY WEBSITE

http://www.naibu.com/websale.asp

http://www.naibu.cn/


MEDIA

Trade fairs

http://v.classone.cn/cshow/DB7BZ4K4.shtml

http://video.sina.com.cn/v/b/91083825-1997490623.html

Television advertising

http://v.youku.com/v_show/id_XNDAxODY4NTc2.html

http://v.youku.com/v_show/id_XMjg1NjAyMjky.html



OPERATIONS OVERVIEW

Naibu is the no.10 sportswear manufacturer in China with 25 distributors and 3,140 retail outlets, primarily in Tier 2 & 3 cities. It is based in Fujian province, with its H.O. in Fuzhou and two factories in Shishi City and Jinjiang. Naibu have a total of 2,315 staff. Just under 2,000, were employed at the Group's production facilities in Jinjiang and Shishi, with most other staff based at the Group's HQ in Fuzhou.

The Naibu brand is focussed on the fast growing student and young adult market. 55% of revenue comes from sale of shoes, 42% from clothing and 3% from accessories. Around two thirds of shoes are made in-house with the remainder manufactured by original equipment manufacturers (OEMs). All clothing and accessories are manufactured by OEMs.

Naibu operates a wholesale model, whereby it sells to 25 distributors in 21 provinces and three municipalities across China. Naibu enjoys good visibility of revenue: the group holds two trade fairs each year to showcase the new collections for the forthcoming two seasons after which the distributors place orders to which they are committed. Naibu does not carry stock risk as goods are sold to distributors on a ‘no returns’ basis.

Naibu continues to gain market share and plans to build two new factories which will double capacity and will be materially earnings enhancing.


SHAREHOLDER INFORMATION

Shares in issue 54,838,716

Significant Shareholders on 18th September 13

Central Win Global Investments Ltd: 50.03%
Easy Capital International Ltd: 8.42%
Montoya Investments Limited 6.6%
Hargreave Hale Limited 6.5%
Black Rock Invest. Management (UK) Ltd 1.76%


FURTHER INFORMATION AND LINKS

http://www.theel1tetrader.com/2013/09/camkids-naibu-global-two-undervalued.html

http://www.investorschampion.com/research/company/naibu-global-international-co/

http://www.sharesmagazine.co.uk/articles/naibu-ready-to-cut-a-dash#.Uix_uD-KM3g

http://www.cityconfidential.co.uk/2013/09/18/naibu-global-64-5p/

Watching very closely. Large sums of cash held but expect volatility here.

Looks promising.....dividend as well.....unusual for such a small market cap....

Rising trend....100p perhaps sometime this year...

Not sure about todays drop apart from some big sells...but it just might be broker to broker or that sort of thing....no news,....other stocks have done the same thing....volatility to lay the least in the markets....picked a few more on the dip....such a small market cap....one of EK's.....risky but the upside is huge...and the Chinese work so hard....stores all over China....

Would like to answer some of the questions that have been raised recently about Naibu. Like I mentioned before I believe the critique of Naibu has been unfair (putting it it politely).

Firstly with regards to Naibu's presence on the internet, the Company has stated - 'At the moment, the main market for Naibu Group is in tier 3 and 4 cities, and the market is not yet mature enough for the Company to carry out online sales (E‐Commerce) in these areas. However, as a new and popular sales method, the Company is encouraging distributors and sub‐distributors to adopt E‐Commerce or promote Naibu products via the internet'

Despite this there is a large amount of information about the Company and its products on the internet.

Firstly Naibu's Chinese website contains links to many of the Company's products -

http://www.naibu.cn/

e.g. - http://www.naibu.cn/product/index.aspx?id=11


An image search using Chinese search engine Baidu reveals a number of products (would like to give credit to Zangdook for providing these links)

http://image.baidu.com/i?tn=baiduimage&ct=201326592&lm=-1&cl=2&fr=ala1&word=%C4%CE%B2%BD

Other Internet presence -

Http://www.shoes.net.cn/pic/1620.html

Http://brand.shoes.net.cn/naibu/

Http://s8.taobao.com/search?q=%C4%CE%B2%BD%D0%AC&pid=mm_29085541_0_0&sort=sale-desc

Naibu also sponsor a popular Chinese pop group -

https://en.wikipedia.org/wiki/Yu_Quan_(pop_duet)

and their performance, with Naibu's logo clearly displayed -

Http://www.56.com/u64/v_OTM4NjExMTc.html


In addition to this we have links to -

Television advertising -
http://v.youku.com/v_show/id_XNDAxODY4NTc2.html
http://v.youku.com/v_show/id_XMjg1NjAyMjky.html

Trade fairs -
http://v.classone.cn/cshow/DB7BZ4K4.shtml
http://video.sina.com.cn/v/b/91083825-1997490623.html

Would recommend viewing the first Trade Fair video. The second Trade Fair video clearly shows the main shareholder and Executive Chairman, Huoyan Lin and the British Deputy Non Executive, Giles Elliot in the audience.

Additionally I would like to add that the Company's Analyst from Daniel Stewarts has personally witnessed Naibu's activities first hand and has toured both the Company's head office, the production facilities and various stores. I also understand that the Company is in the process of upgrading their website and shareholders will soon be able to see many more photographic images of Naibu's various activities.

Think that's enough evidence for today ....

Good rise today....

Rise baby...rise...

Fascinating moves lately. I was stopped out previously here but keeping an eye on things. So cheap and good article in IC week ago

Still climbing....

Excellent results...divi as well.....looks good to me, company looks undervalued...

I've bought a few here this morning.

Ditto Skinny.....

bohemian13 - can you put a chart in the header please.

Up again....looking good...

Rising again...goody....

Ex dividend Wednesday July 2nd - 4p

Might be a nice time to get back in if you believe the cash is safe.

Trading Update

Trading H1 2014

The Company's unaudited sales revenue grew to RMB 1,030 million for the period ended 30 June 2014, an increase of 8.4% compared with the same period in 2013. Revenue from the sale of shoes accounted for 53.6% (RMB 552 million), the sale of clothing for 44.2% (RMB 455 million) and the sale of accessories represented the remaining 2.2% of revenues (RMB 23 million).

Autumnand Winter SalesFair

During May 2014, the Company held its seasonal sales fair with distributors to showcase its 2014 autumn and winter collection. The Board is pleased to report that the value of sales orders taken at this fair were 5.0% higher compared to the equivalent fair held in the previous year.

Production Facilities

Quangang

As a result of sudden and continuing labour shortages which have driven labour costs up in the coastal regions, the Company has been unsuccessful in recruiting sufficient workers for 6 production lines to become operational by August 2014. This shortage of labour is expected to continue for the foreseeable future and consequently, the Company has taken the decision to abandon the commencement of production at Quangang. The Company is currently in negotiations to rent out the facility and will at the same time commence marketing the property for sale.

In the interim, the company has made arrangements with its OEM suppliers to supply the shoes which it would have otherwise have produced at Quangang and therefore, there will not be any disruption to production. There will, however, be a small impact on the Company's results.

Dazhu

In respect of the land use rights of the Naibu Industrial Zone in Dazhu county, Sichuan Province, the Group paid a second installment of RMB 30 million in May, and the remaining RMB 22 million is expected to be paid upon the grant of the land use rights certificate.

The land is in the process of being prepared by the local government. It is expected that this work will be completed in October 2014 and the facility to be operational in Q2 2016.

Mr. Lin Huoyan said, "Although the Company has encountered some difficulties with putting the Quangang factory into operation due to a sudden change in the labour market in the coastal regions, given the revenue achieved in H1 2014 and the orders that have been received for the remainder of the year, I am confident that my management team has the capability to overcome the setback at Quangang and the Group is ready to accept the challenge and to achieve sustainable development going forward."

- Ends -

Dividend received this morning - hardly makes up for the recent weakness - approaching a gap in the chart.