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Weiqiao Textile effectively curbs downward profit trends
07 Sep '09
5 min read
During the Period under Review, the Group continued to actively expand its market share and consolidate its customer base. As at 30 June 2009, the Group had 8,500 domestic customers and 830 overseas customers, representing an increase of approximately 3.7% and 3.8% respectively over the same period last year, hence consolidating and expanding the Group's sales network and customer base.
The acquisition of the thermal power assets from Shandong Weiqiao Chuangye Group Company and Zouping Gaoxin Thermal Power Co., Ltd. in 2008 increased the Group's installed power generation capacity to approximately 1,590 MW. In the current challenging operating environment, the operation of these thermal power assets by the Group could effectively reduce the costs of production, while increasing profit. For the six months ended 30 June 2009, Weiqiao Textile's sale of electricity and steam amounted to approximately RMB1,553 million, resulting in gains of approximately RMB500 million.
In light of the negative changes in the global condition, the Chinese government has taken decisive measures, including market expansion and technology upgrade, to support the development of the textile industry in the PRC. During the Period, the Chinese government further raised the VAT rebate rate of the exports of textile products to 16%. As the economic stimulus package totaling to RMB4 trillion gradually delivers its synergies and the government's policies to expand the domestic demand, ensure growth and adjust structure begin to take effect, the PRC economic environment is showing tentative signs of recovery. However, improvement of the overall macro-economic environment has yet to be realized and it is difficult to reverse the prevailing shrinking demand in a short term. The textile industry will continue to be affected by the overall global economic environment.
Ms. Zhang concluded, “In response to the extremely challenging market environment, the Group will continue to strengthen its production innovation and technology upgrade, and produce more value-added and medium-to-high-end products complying with the Chinese government's efforts in promoting technology upgrade among the enterprises. In addition to enhancing internal management, providing staff training and improving staff quality, the Group will exercise stringent cost control while optimizing the product mix and strengthen its core competitiveness, so as to maintain its leading position among its industry peers and create value for its shareholders.”
Weiqiao Textile Company Limited ("Weiqiao Textile" or the "Company", together with its subsidiaries, collectively known as the "Group") is principally engaged in the production, sale and distribution of cotton yarn, grey fabric and denim.
The acquisition of the thermal power assets from Shandong Weiqiao Chuangye Group Company and Zouping Gaoxin Thermal Power Co., Ltd. in 2008 increased the Group's installed power generation capacity to approximately 1,590 MW. In the current challenging operating environment, the operation of these thermal power assets by the Group could effectively reduce the costs of production, while increasing profit. For the six months ended 30 June 2009, Weiqiao Textile's sale of electricity and steam amounted to approximately RMB1,553 million, resulting in gains of approximately RMB500 million.
In light of the negative changes in the global condition, the Chinese government has taken decisive measures, including market expansion and technology upgrade, to support the development of the textile industry in the PRC. During the Period, the Chinese government further raised the VAT rebate rate of the exports of textile products to 16%. As the economic stimulus package totaling to RMB4 trillion gradually delivers its synergies and the government's policies to expand the domestic demand, ensure growth and adjust structure begin to take effect, the PRC economic environment is showing tentative signs of recovery. However, improvement of the overall macro-economic environment has yet to be realized and it is difficult to reverse the prevailing shrinking demand in a short term. The textile industry will continue to be affected by the overall global economic environment.
Ms. Zhang concluded, “In response to the extremely challenging market environment, the Group will continue to strengthen its production innovation and technology upgrade, and produce more value-added and medium-to-high-end products complying with the Chinese government's efforts in promoting technology upgrade among the enterprises. In addition to enhancing internal management, providing staff training and improving staff quality, the Group will exercise stringent cost control while optimizing the product mix and strengthen its core competitiveness, so as to maintain its leading position among its industry peers and create value for its shareholders.”
Weiqiao Textile Company Limited ("Weiqiao Textile" or the "Company", together with its subsidiaries, collectively known as the "Group") is principally engaged in the production, sale and distribution of cotton yarn, grey fabric and denim.
Weiqiao Textile Company Limited
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