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HONG KONG, Feb 7, 2013 - (ACN Newswire) - Hengdeli (3389-HK) published an announcement last night and made a detailed clarification against several allegations from a related media, so as to clear the public's doubts.
The Company said, its store locations are adjusted, including closing of stores, in response to the change of market. The Company will actively listen to the opinions from different parties in the future and increase the information update frequency in order to optimize the disclosure on the Company's website. Regarding the allegation that one of the Company's stores in Henan Province still uses the name "Henan Fuhao Watch*", the Company Said, many entities have been trading in the same name in cities in Mainland China for historical reason. The Company has not changed the name "Henan Fuhao Watch*" in order to show respect to local trademark rights,
In addition, in response to the allegation that the Company had a negative cash flow and high inventory level in the past, the Company clarified that the operating cash outflow mainly is caused by the expansion of network, while the increase in inventory is attributed to strategic consideration.
Moreover, the Company pointed out that since its strategical adjustment of development, the Company is no longer independently wholesales the brands of Omega and Rado since 2003. Instead, a joint venture company has been set up with Swatch for the wholesale business of Omega, Rado and Longines. And for the allegation that the Company's brand distribution rights are gradually taken back, the Company responded that the selection of brands by the Company is market-oriented and a result from the negotiation with brand suppliers.
The Company said, apart from fund raising, the Company adopts a minimum cash balance requirement and, increases the level of borrowing so to increase the cash balance for business expansion.
Hengdeli repurchased its own shares for five consecutive days, reflecting a full confidence to its future development. Along with the clarification made to the public towards the various allegations, the doubts are cleared and its business and earnings prospects remain optimistic.
* English transliteration of Chinese terms for identification purpose only
Topic: Press release summary
Source: Hengdeli Holdings Ltd
Sectors: Daily Finance, Daily News
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From the Asia Corporate News Network
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