Operations Review:
In 2007, exports of textile products and clothing in China grew steadily albeit at a reduced growth rate. According to Customs statistics, exports of textile products and clothing amounted to US$175.6 billion in 2007, an increase of 19.11% over 2006 with a drop of six percentage points in the growth rate. Exports of cotton textile products and clothing amounted to US$72.063 billion, an increase of 28.69% over 2006, while the growth rate dropped by 7.5 percentage points.
The Group continued to pursue its course in industry enhancement and to strengthen the sales of its core products and optimize product mix. Cotton yarn, grey fabric and denim remained the Group's core products by sales volume. Their sales accounted for 45.1%, 47.8% and 6.9% of the Group's total revenue respectively.
During the year under review, the Group continued to actively expand its market share and explored new markets. As at 31 December 2007, the Group had a total of 8,000 domestic customers and over 780 overseas customers, up 6.7% and 8.3% respectively from 2006.
Gross profit and gross profit margin:
For the twelve months ended 31 December 2007, the Group's gross profit margin decreased to 14.3%, compared with 2006. The decrease was mainly attributable to a decrease in the gross profit margin as the Company cut prices in response to a decline in market demand due to several unfavourable factors such as the appreciation of the renmimbi, a reduction in the tax refund rate and macroeconomic control policy.
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Weiqiao Textile Company Limited
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