Weiqiao Textile Group EPS skyrockets 90.5% in 2012

18 Mar '13

4 min read

Weiqiao Textile Company Limited and its subsidiaries the largest cotton textile producer in China, announced its annual results for the year ended December 31, 2012

Financial Summary

-Revenue was approximately RMB15, 248 million, about the same level as in 2011

-Gross profit was approximately RMB1, 037 million, an increase of approximately 273.0%

-Net Profit attributable to owners of the parent was approximately RMB482 million, an increase of approximately 95.9%

-Earnings per share were RMB0.40, an increase of approximately 90.5%

-Proposed final dividend of RMB0.1246 per share (including tax), an increase of approximately 109.8%

Since the beginning of 2012, the Chinese textile industry has faced a very complex and volatile environment both domestically and overseas. A variety of adverse factors such as weak demand in overseas markets, slowing growth in domestic markets, widening gaps between domestic and overseas cotton prices, and increasing production costs, has resulted in a notable slowdown in China's textile industry.

However, growth rates of the textile industry's major economic indicators have picked up slightly since September of 2012 due to stable growth in domestic demand, adjustments made by enterprises in commodity inventory levels, and lower comparable basis in 2011; while the gap between domestic and overseas cotton prices continued to widen, and demand from international markets remained sluggish, leaving the prospect for an industry recovery on shaky ground.

In 2012, as market conditions in the textile industry were grim, the Group recorded revenue of approximately RMB15, 248 million, about the same level as in 2011. Net profit attributable to owners of the parent company was approximately RMB482 million, representing an increase of approximately 95.9% as compared with 2011. Earnings per share were RMB0.40. The Board recommended the payment of a final dividend of RMB0.1246 per share (tax inclusive) for the year ended 31 December 2012.

During the Year, the Group's production volume of cotton yarn, grey fabric and denim were approximately 450,000 tones, 1,045 million meters and 89 million meters, respectively. The production volume of cotton yarn, grey fabric and denim decreased by approximately 27.2%, 10.3% and 12.7%, respectively, year over year.

The decrease was mainly because of intensified competition in the industry during the Year under Review as a result of the weak demand in the textile products market and large cotton price gap between domestic and overseas markets. The Group adjusted its production plan accordingly to reduce production volume in order to reduce its inventory level.

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