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| Aims to enhance profit margin through Restructuring of customer base |
HONG KONG, Aug 27, 2014 - (ACN Newswire) - Grand Concord International Holdings Limited (Stock Code: 844), the leading functional fabric and innerwear manufacturer in China, is pleased to announce its unaudited condensed consolidated results of the Group for the 6 months ended 30 June 2014 (the "period under review").
China textile and apparel industry as a whole has yet to achieve full recovery during the first half of 2014. The sluggish domestic demand upon the implementation of macro-economic control policies, the whole industry was still struggling to find its way to bottom out. For the six months ended 30 June 2014, the Group's revenue was approximately RMB205.0 million (2013: RMB209.0 million), representing a decrease of approximately RMB4.0 million, or approximately 1.9%, as compared with same period in 2013. The decrease was mainly due to the decrease in the sales of the Group's general innerwear products to the United States. Gross profit decreased by approximately 4.0% to approximately RMB45.9 million for the six months ended 30 June 2014 as a result of a slight decrease in average unit selling price and an increase in unit production cost of the innerwear products and knitted fabrics products. Gross profit margin slightly decreased to approximately 22.4%. In order to increase business profitability in the long run, the Group has launched a restructuring plan on its existing customer base from the United States in the period under review, which thus, significantly reduced the orders from customers in the United States.
The overall sales performance of the Group in 2014 was satisfactory particularly that of functional fabrics and innerwear products.
Despite the challenging operating environment, during the period under review, the Group continued to invest in advanced and environmental-friendly production machineries to further improve automation efficiency, optimize the allocation of labor during the production process in order to cope with the increasing labor costs and provide a stronger fundamental for further development. Furthermore, the Group has strenuously devoted in the research and development of new products and enhancement of the environmental protection quality of its functional fabrics products, with different components, design and specifications catering for the rapidly expanding market demand in the leisure, home and sports markets. In consideration of reserving capital for enhancement of production capability and expand overseas market, the Board resolved not to recommend the payment of interim dividend for the six months ended 30 June 2014 (2013: nil).
In view of overseas market, the Group remains confident in the Japanese market that the demand of Japan market would remain stable. During the period under review, the Group was actively identifying new customers from the European market, and looking for more customers from the United States who demand for quality functional fabrics and innerwear products. Despite the pressure on the unit selling price, the Group believes that, through effective cost control, production and development of various functional products, it will continue to generate stable revenue while maintaining friendly and mutually beneficial relationships with its customers.
Prospect
Looking forward, Mr. Wong Kin Ling, Chairman of the Group, commented, "First half of 2014 remained rather challenging for us given the unstable economic conditions. Putting aside all unfavorable factors, we see new opportunities ahead as customers in the world are becoming more concerned about environmental-friendly and healthy lifestyle with lower carbon emission, which gives room for the development of functional fabric and innerwear with emphasis on energy saving and emission reduction. New product features under research also create big business opportunities for textile enterprises. Industry outlook remains positive. The Group will continue to expand its production capacity, upgrade its equipment, improve its production automation capabilities and adopt more advanced production technologies. The Group will also work on raising its production efficiency, lowering its operating costs, and expanding at the same pace as its development. It is the goal to bring more significant economic benefits upon scale expansion in the future."
Topic: Press release summary
Source: Grand Concord International Holdings Limited
Sectors: Daily Finance, Daily News
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From the Asia Corporate News Network
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