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Hong Kong : Texhong Textile profit jumps 40.2% in H1 |
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2006-8-22
Texhong Textile Group Limited, a leading upstream high value-added core-spun cotton textile manufacturer in the PRC, announced record high interim results for the six months ended 30th June 2006.
Turnover of the Group increased by 41.7% to RMB 1,198.0 million. Net profit increased by 40.2% to RMB 111.6 million. Earnings per share during the period was RMB0.128, representing an increase of 40.7% over the corresponding period last year.
In view of the encouraging results, the Board has resolved to declare an interim dividend of 3 HK cents per share for the six months ended 30 June 2006.
Hong Tianzhu, Chairman of Texhong, said, "During the first half of 2006, the Group's sales of spandex stretch yarn and grey fabrics in the PRC market have achieved another record high results in terms of volume. Overall gross profit margin and net profit margin maintained at the similar level as the same period last year. Sales in each market recorded significant growth in the first half of 2006, in which sales revenue of the PRC market posted a year-on-year growth of 37.9% to RMB 1,051 million, while overseas sales surged by 75.9% to RMB 147 million.”
“During the period under review, the Group's yarn and grey fabrics were sold to over 17 provinces and cities in the PRC, while garment fabrics was exported to numerous countries overseas such as Europe, North America, South Korea, Hong Kong, Bangladesh, etc.,” he added.
The Group continued to implement its product differentiation strategy in the first half of 2006 and launched innovative new core-spun cotton textile products including Dow XLA stretch and other quality elastic yarn and grey fabrics.
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In June 2006, the Group entered into a strategic Letter of Intent with Dow Chemical (China) Investment Co Ltd, the world's leading chemical player, to co-develop new generation of elastic fiber XLA(R) technology and products. Texhong will benefit from Dow Chemical's highly efficient sales and marketing strategy and unrivalled brand awareness as well as strong clientele in the international fashion market.
The Group's new production base with 100,000 spindles in Suining County, Xuzhou, Jiangsu Province has commenced operation in the first quarter of 2006 and has quickly achieved high utilization rate of over 95%. Currently, it has 11 production bases in China with approximately 470,000 spindles and more than 1,100 shuttless looms, representing an increase of 16.8% and 14.4% in production capacity of yarn and fabrics respectively, as compared to the Group's production capacity at the beginning of 2006.
Looking ahead, the Group will further strengthen its sales and marketing efforts both in the domestic market as well as overseas markets. Its regional headquarters in Shanghai has been successfully established as an international operating platform. It will act as the sales window of the Group's core-spun yarn and fabric products in the PRC market starting from the fourth quarter this year.
In addition, the Group will gradually expand its export sales team in Hong Kong. It is expected that its export sales and marketing arm will be further strengthened.
To cope with the ever-increasing market demand of the high quality core- spun yarn and fabric products and to optimise economies of scale, the Group has been looking for low cost acquisition opportunities in the PRC. In July 2006, it acquired a state-owned textile factory from Yizheng Group and Changzhou Municipal Government at a consideration of RMB 98,577,901 (equivalent to approximately HK$94,786,443).
Fibre2fashion News Desk |
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