Create a Wonderful Life

Transcription

1 创意精彩生活 Create a Wonderful Life

2 Content Business Review Financial Review Future Plans Q&A 2

3 Business Review 3

4 Highlights Revenue increased by 27.9% to RMB 7.45 billion Profit attributable to equity holders increased by 41.2% to RMB 645 million One-off gain from the acquisition of jeanswear business Operation subsidy income of the Xinjiang factory began to normalise Complete acquisition of jeanswear business Driven by the rise in sales volume and unit price of yarns Yarn sales volume increased significantly by 14.9% to 300,000 tonnes New factories that commenced production in stages last year are now running at full steam Instant increase of production capacity and expansion of customer base for jeanswear business 4

5 Differentiated Product Mix Yarns 1 Group s core product Revenue reached RMB6.75 billion in Accounted for 90.7% of the Group s total revenue Sales volume increased by 14.9% to 300,000 tonnes 90.7% 9.3% Fabrics, Garments & Jeanswear Yarn (Over 1,200 types) Grey Fabrics (Over 2,700 types) Garment Fabrics Jeans 4.5 million pairs Stretchable Yarn Other Yarn 1 Percentage of product segment revenue to total revenue for the six months ended 30 June

6 Diversified Production Base Location As of 30 June 2017 Production facilities Utilisation rate As of 31 Dec 2016 Production facilities Utilisation rate The PRC 1.64 million spindles, 817 looms and 6 production lines of jeans Yarns 100% 1.64 million spindles, 816 looms and 6 production lines of jeans Yarns 100% Vietnam Cambodia 1.25 million spindles, 400 looms (ramp-up stage) and 14 production lines of jeans 22 production lines of jeans Yarns 100% 1.25 million spindles Yarns 100% In progress of adjustment 12 production lines of jeans In progress of adjusting and increasing production 6

7 Strong Product Development Establish long-term strategic partnerships Continue to cooperate with INVISTA, an international core-spun spandex fibre manufacturer of LYCRA fibre, and Lenzing Fibers, the manufacturer of TENCEL lyocell fibre and Modal fibre Use innovative fibre technologies to produce trendy functional yarns Tap into the differentiated high-end market Develop new products Meet the demand of quality customers for different high-end products Reinforce cooperative relations with Toray of Japan from the yarn business to denim garment business as well Expand cooperations with fibre companies Improve product quality The R&D centre in Xuzhou has been raising product quality according to market demand 7

8 Diversified Customer Base Over 3,000 customers, of which ~2,700 are domestic and ~300 are overseas customers. About 84% of products are sold in the PRC, mainly in areas around Jiangsu, Zhejiang, Guangdong and Shandong Sales network extended to Vietnam, Brasil, Turkey, Bangladesh, Japan and South Korea Sales to top 10 customers only accounted for 17.0% of total revenue in Shaoguan Shunchang Weaving Factory Co., Ltd. Ningbo Daqian Textile Co., Ltd. Guangdong Qianjin Jeans Co., Ltd. Toray International, Inc. Zhejiang Limayunshan Textile Co., Ltd. Xinchangjing Textiles Co., Ltd. TCE Vina Denim Joint Stock Company Yixing Magnolia Garment Co., Ltd. Black Peony Textile Co., Ltd. Foshan Seazon Textile & Garment Co., Ltd. 8

9 Financial Review 9

10 Revenue Revenue reached to RMB7.45 billion Revenue breakdown by products Stretchable core-spun yarns Cotton Demin Synthetic fibre Other yarns RMB (Million) Cotton Demin Synthetic fibre Stretchable core-spun yarns Other yarns Fabrics Jeans % 3.00% , , , , H2016 1H2016 Fabrics Jeans Stretchable grey fabrics Garment fabrics Other grey fabrics % 49.69% H2016 1H

11 Profit & Net Profit Margin Gross Profit RMB (Million) Net Profit 1 RMB (Million) Gross Profit Gross Profit Margin Net Profit Net Profit Margin 1,300 1,200 1,100 1, , % 1H % 1, % 1, % 1H % % 1) Profit attributable to owners of the company 11

12 Sales Volume & Selling Price Stretchable core-spun yarns (Tonne) Other yarns (Tonne) 80,838 82,025 1H ,396 54,878 19,791 21,008 1H ,979 65,202 43,567 47,815 30,690 30,403 Cotton Demin Synthetic fibre RMB per tonne Cotton Denim Synthetic fibre 22,559 24,637 23,723 1H ,508 23,281 23,470 Cotton Demin Synthetic fibre RMB per tonne Cotton Denim Synthetic fibre 22,175 19,485 22,207 1H ,738 17,073 20,803 Fabrics (Million meters) Jeans (Million pairs) 1H2016 1H Stretchable grey fabrics Other grey fabrics Garment fabrics RMB per meter Stretchable grey fabrics Other grey fabrics Garment fabrics H RMB per pair Jeans Jeans H

13 Cost Structure Consumables 1.5% Utilities 6.2% Others 0.7% Consumables 1.7% Utilities 7.0% Others 0.8% Depreciation 4.3% Depreciation 4.4% Direct Labour 10.1% Direct Labour 10.7% Raw Materials 77.2% Raw Materials 75.4% 1H

14 Other Income RMB (million) One-off Policy Incentives Six months ended 30 June 2017 Operating Subsidies 1 Total Xinjiang Other area Total Operating subsidies refer to business-related recurring subsidies, such as subsidies for loan interest, transportation etc. 14

15 Consolidated Income Statement RMB (million) Unaudited six months ended 30 June Revenue 7, ,821.8 Cost of sales (6,301.9) (4,760.6) Gross profit 1, ,061.2 Selling and distribution costs (263.9) (216.3) General and administrative expenses (247.4) (226.8) Other income Other gains net Operating profit Finance income Finance costs Share of profits/(losses) of investments accounted for using the equity method (57.2) (164.3) 6.3 (1.2) Profit before income tax Income tax expense (104.7) (86.9) Profit for the period Profit attributable to owners of the company

16 RMB (million) Balance Sheet Assets Unaudited As at 30 June 2017 Audited As at 31 December 2016 Freehold land and land use rights Property, plant and equipment 6, ,231.1 Investments accounted for using the equity method Deferred income tax assets Total non-current assets 7, ,142.7 Inventories 3, ,931.3 Trade and bills receivables 1, ,590.0 Prepayments, deposits and other receivables ,308.1 Derivative financial instruments Pledged bank deposits Cash and cash equivalents 1, ,813.2 Total current assets 6, ,141.7 Total assets 14, ,

17 RMB (million) Balance Sheet Liabilities and Equity Unaudited As at 30 June 2017 Audited As at 31 December 2016 Trade and bills payables 2, ,044.3 Accruals and other payables Current income tax liabilities Borrowings 2, ,549.7 Derivative financial instruments Total current liabilities 5, ,420.0 Borrowings 3, ,559.6 Deferred income tax liabilities Total non-current liabilities 3, ,673.0 Share capital: nominal value Share premium Other reserves Retained earnings 4, ,051.6 Non-controlling interests Total equity 5, ,

18 Cash Flow Statement RMB (million) Unaudited six months ended 30 June Net cash generated from operating activities 1, Net cash used in investing activities (817.7) (1,261.0) Net cash (used in) / generated from financing activities (1,226.7) Cash and cash equivalents at end of the period 1,

19 Other Financial Ratios As at 30 June 2017 As at 31 December 2016 Inventory Turnover Days Trade and Bill Receivables Turnover Days Trade and Bill Payables Turnover Days Current Ratio Debt to Equity Ratio Net debt to Equity Ratio Return on Equity 3 28% 26% 1) Based on total borrowings over equity attributable to shareholders 2) Based on total borrowings net of cash and cash equivalents and pledged bank deposits over equity attributable to shareholders 3) Based on profit attributable to shareholders for the 12 months ended of the reporting date over the average of the equity attributable to shareholders at the beginning and ending of the period 19

20 Future Plans 20

21 The Group s strategies Grasp the opportunities & Strengthen its existing market position TEXHONG 天虹紡織 Form an integrated platform comprising a downstream industry chain 21

22 The Group s strategies Expand production capacity & jeanswear business Expand capacity to meet quick delivery orders Expand jeanswear business Procure second-hand equipment to expand domestic production capacity by 100,000 spindles Investment of RMB100 million Expect to be in full operation in Q Establish a brand new intelligent yarn spinning factory with 140,000 spindles in Xuzhou Investment of RMB500 million Expected to be completed Q Completed the acquisition of denim garment factories in Vietnam and Cambodia and the associated business of Nien Hsing Textile Target to achieve a turnaround in 2018 Jointly established a garment factory in Vietnam with Changzhou Hualida Group Target leading brands in Japan Orderly expansion of the main operation Targeted sales volumes of yarn 2017: 650,000 tonnes 2018: 720,000 tonnes Target to become a growth driver in mid-to-long term 22

23 Q & A 23