November 24, 2010 / 1:06 PM / in 7 years

UPDATE 1-China's Zungui Q1 profit falls on higher costs

* Q1 EPS C$0.11 vs C$0.15 last year

* Q1 rev up 17 percent

Nov 24 (Reuters) - Clothing and footwear retailer Zungui Haixi Corp’s ZUN.V quarterly profit dropped 8 percent, hurt by higher expenses on opening new stores and selling costs.

The Chinese company, which completed its Canadian initial public offering in December, reported a profit of C$7.1 million, or 11 Canadian cents a share, for July-September, compared with C$7.7 million, or 15 Canadian cents a share, a year ago.

Revenue rose 17 percent to C$50.4 million.

The company, which opened 120 new distributor-owned retail outlets in the quarter, said selling expenses more than doubled to C$1.78 million.

Zungui is one of the several Chinese companies which have launched its business in Canada as the two countries’ trade ties strengthen. Trade between the two countries reached nearly $35 billion in 2008, making China Canada’s No. 2 trading partner after the United States.

Some of the other companies which have entered Canadian market are Industrial and Commercial Bank of China 0349.HK, Sinopec (600028.SS) and China Investment Corp.[ID:nN06113833]

Zungui Haixi shares, which have lost about 8 percent since going public, closed at C$2.95 on Tuesday on the Toronto Venture Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Maju Samuel) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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