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'We will improve our operating efficiency' - Weiqiao Chairman
30
Mar '09
Ms. Zhang Hongxia, Chairman
Ms. Zhang Hongxia, Chairman
The Board of Directors of Weiqiao Textile Company Limited, the largest cotton textile producer in China, is pleased to announce the annual results of the Company and its subsidiaries for the year ended 31 December 2008.

For the year ended 31 December 2008, the Group's revenue was approximately RMB16,453,000,000, representing a decrease of 11.5% when compared with last year. Net profit attributable to shareholders of the Company was approximately RMB596,000,000, representing a decrease of 68.1% as compared with the previous year and earnings per share amounted to RMB0.50. The decrease in net profit attributable to shareholders of the Company was mainly attributable to the decrease in demand from the external textile product market, more intense competition in the domestic textile product market as a result of the effect of the general economic environment and the selling price reduction strategy adopted by the Group to gain the market share and client resources, leading to a decrease in profit margin. The Board proposed a final dividend of RMB0.1569 per share for the year ended 31 December 2008.

Commented on the Group's annual results, Ms. Zhang Hongxia, Chairman of Weiqiao Textile, said, “The global financial tsunami triggered by the US subprime crisis in 2008 had a heavy impact on the global economy. Although the Chinese government took decisive measures to sustain the stable development of the national economy by easing monetary policy, increasing infrastructure investment and expanding domestic demand in the second half of the year 2008, the growth of the Chinese economy slowed down under the influence of the economic recession in Europe and the US. In this difficult and changing market environment, Weiqiao Textile's operational results were also significantly affected.”

For the year ended 31 December 2008, the Group's production volume of cotton yarn, grey fabric and denim were approximately 819,000 tons, 1,452,000,000 meters and 167,000,000 meters, representing a decrease of 8.1%, 11.8% and 7.2%, respectively, as compared with last year. This was mainly attributable to an increase in medium-to-high-end products as a result of the adjustment made by the Group to the product portfolio in accordance with the market demand, which led to a slight decrease of production volume. During the period under review, the proportion of revenue from grey fabric and denim increased as compared with last year.

Such increase was mainly due to the adjustment of products' portfolio by the Group according to the change in market demand. And the revenue of cotton yarn decreased as compared to last year, which was mainly attributable to the continuous contraction of the cotton yarn export markets under the impact of the global financial crisis. In particular, demand for the knitwear market was sluggish with more intensive competition, the Company adopted price reduction strategy to boost sales, resulting in a decrease in the sales revenue from cotton yarn.

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