- Gross Profit Margin Increases to 18.0%
- Sales Volume of Yarn Sets Record High of 477,000 Tonnes
- Development of Textile Industrial Chain Platform in Vietnam in Full Swing
HONG KONG, Mar 8, 2016 - (ACN Newswire) - Texhong Textile Group Limited ("Texhong Textile" or the "Group"; stock code: 2678), one of the world's largest core spun yarn suppliers, today announced its annual results for the year ended 31 December 2015 ("Review Year"). During the Review Year, sales volume of the Group's yarn increased by approximately 10.5% to 477,000 tonnes, reaching a record high as compared with the same period last year, while revenue amounted to RMB10.57 billion. Attributable to the stable selling price of yarn, lower raw material costs and product mix enhancement, gross profit margin rose from 12.4% to 18.0% - resulting in the Group's profit attributable to shareholders to surge by 92.6% to RMB590.8 million. Earnings per share also increased notably by 91.4% to RMB0.67.
The Board has resolved to declare a final dividend of 12 HK cents per share for the year ended 31 December 2015 to shareholders. Together with the interim dividend of 12 HK cents per share, the dividend per share for the year totaled 24 HK cents.
Mr. Hong Tianzhu, Chairman of Texhong Textile, said, "The Chinese cotton textile industry developed at a slower pace in 2015. Being a leader in the country's cotton textile industry, Texhong Textile managed to boost yarn sales volume to unprecedented levels by fully utilizing its spindle capacity. Moreover, benefitting from the stable price of yarn - a result of stabilizing cotton prices in China - along with product mix enhancement, the Group's gross profit margin climbed by 5.6 percentage points, leading to a substantial increase in the Group's profitability."
During the Review Year, Texhong Textile acquired the yarn spinning business, together with all of its yarn spinning related technologies and patents of Central Textiles (Hong Kong) Group. This move provided more flexibility for the positioning of the Group's differentiated goods produced in the new production base in Xinjiang. The Group has also entered into a cooperation framework agreement with Wah Fung Group. In addition to the proposed investment in Wah Fung Group, the two parties have agreed to jointly develop a knitting and dyeing business in Vietnam, which will be a crucial step for the Group to implement its strategy of building a textile industry chain platform. The Group also acquired part of a jeans wear manufacturing group's workforce and equipment in China and Cambodia, providing invaluable experience for the development of the jeans wear business in Vietnam.
Texhong Textile will continue to expand its production capacity through self-development and mergers and acquisitions. By the end of 2015, the Group had a total of approximately 2.20 million spindles and 572 looms. As the two yarn projects in Vietnam Galaxy and China Xinjiang are expected to commence operations in the second and third quarters of 2016 respectively, the Group's spindle capacity will be further enhanced by approximately 28% to 2.81 million spindles, with 1.57 million spindles in China and 1.24 million spindles in Vietnam.
The Trans-Pacific Partnership Agreement ("TPP") was officially signed in February 2016 and is expected to come into effect in around 2018. In the coming years, Vietnam will continue to be a key region for high quality textile corporations in China seeking to expand into foreign markets. In view of the cost advantages and development prospects presented by TPP, Texhong Textile, the largest professional yarn manufacturer in Vietnam, will take advantage of its current position to expedite the implementation of its strategy of developing an international industrial chain platform in Vietnam, thereby capturing potential business opportunities created by TPP. The Group will commence construction of phase II of a grey fabric factory, a dyeing factory and a garment factory of the Vietnam Galaxy project in 2016. Phase I of fully-integrated industry chain production supporting sales objectives are expected to be achieved in 2017.
Mr. Hong concluded, "Texhong Textile will continue to implement its established corporate strategies, optimize product mix and develop new products that accommodate market trends and needs. We will further improve our business performance by leveraging our existing international presence."
About Texhong Textile Group Limited
Founded in 1997 in Hong Kong and listed on the HKEX in 2004, Texhong is one of the largest core spun yarn suppliers in the world. The Group is principally engaged in the production and distribution of quality yarn, grey fabrics and garment fabrics, especially of high value-added core-spun yarn. Since established, the Group has grown rapidly and has over 3,000 customers in China and overseas, with its sales network spanning across the China, Japan, Turkey, Brazil, South Korea and Bangladesh. As at 31 December 2015, the Group has about 2.20 million spindles equivalent in full operation, of which about 1.21 million spindles and 0.99 million spindles are in China and Vietnam, respectively.
In 2015, the Group was named as one of the "Top 500 Companies in China 2015" by Fortune, an internationally renowned magazine.
Contact:
Strategic Financial Relations Limited Brenda Chan Tel: (852) 2864 4833 Email: brenda.chan@sprg.com.hk Cecilia Shum Tel: (852) 2864 4890 Email: cecilia.shum@sprg.com.hk Lolo Yu Tel: (852) 2114 4955 Email: lolo.yu@sprg.com.hk Fax: (852) 2527 1196 Corporate website: www.sprg.com.hk
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