Billion Industrial Holdings Limited announced its unaudited consolidated interim results for the six months ended 30 June 2012 (the “Review Period” or the “Period”). During the review period, the Group’s revenue increased by 0.1% to RMB2,972 million (RMB2,969 million in the first half of 2011), of which, domestic sales and exports accounted for 90.1% and 9.9% respectively.
Domestic sales increased by 4.4% to approximately RMB2,678 million (RMB2,565 million in the first half of 2011); export sales decreased by 27.2% to approximately RMB294 million (RMB405 million in the first half of 2011). The slight increase in sales was attributable to the increase in sales volume during the period. The decrease in the prices of raw material during the period led to a decrease of average selling prices of products within the industry including the products of the Group.
Gross profit decreased by 3.7% to RMB613 million (RMB636 million in the first half of 2011). Gross profit margin decreased from 21.4% in the same period of last year to 20.6%, which was attributable to the more competitive business environment as compared with the same period last years, coupled with a greater decline in selling prices than that of raw materials.
In the first half of 2012, the recovery of the global economy remained uncertain as it was still affected by the European debt crisis. However, we did see signs of economic recovery in the U.S. although the recovery has been weaker than previously expected. While adjusting its economic structure, the economic growth of China has further slowed down in the first half of 2012, but it was still considered to be a rapid and stable growth if measured by international standard. With weaker demand from foreign markets, domestic demand has evidently become more important in driving China’s economic growth. We also saw rapid growth of retail sales in the second and third tier cities due to the continuing growth of domestic consumer demand.
Mr. Sze Tin Yau, Chairman of Billion, said, “In the first half of 2012, the decrease of average selling prices of the products slightly exceeded the decrease of the prices of raw materials, resulting in a decline of the overall profit margin in the industry. However, our sales volumes increased despite of the drop in sales price. At the same time, the overall profitability of the Company also remained stable due to our long term investment in research and development and our marketing efforts in promoting differentiate products.
“The year 2012 is full of challenges for both China and the global economy. Meanwhile, we believe that the domestic market will recover faster than overseas market. In the consumer sector, the growth of home furnishings market remains at a relatively high growth level which will further enhance the demand for polyester products. Looking ahead, we will actively expand our sales in overseas emerging markets in addition to continue expanding our presence in the domestic market.