2024年3月29日 公司研究 23 年需求疲弱下业绩承压，24 年期待盈利能力逐步改善 ——天虹国际集团（2678.HK）2023 年业绩点评 增持（维持） 要点 当前价：4.28元港币 23年收入同比下滑5%、归母净利润亏损3.76亿元 作者 天虹国际集团发布2023年业绩。公司实现营业收入227.25亿元人民币、同比下滑 分析师：唐佳睿 CFA FCPA(Aust.) 4.5%，归母净利润亏损3.76亿元、同比转亏，EPS为-0.41元。分上下半年来看， ACCA CAIA FRM 2023年上半年公司收入同比下滑17.1%，归母净利润亏损7.47亿元、同比转亏； 执业证书编号：S0930516050001 021-52523866 下半年公司收入同比增长10.6%，实现归母净利润3.71亿元、同比扭亏，下半年业 tangjiarui@ebscn.com 绩初步改善；上下半年归母净利率分别为-6.92%、3.11%。 分析师：孙未未 23 年公司内销、出口收入占比分别为 69%、31%。受全球经济、地缘政治冲突影 执业证书编号：S0930517080001 响海外需求较为疲弱且存在去库存压力，中国市场需 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部分內容 而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 TEXHONG INTERNATIONAL GROUP LIMITED 天虹國際集團有限公 司 （股份代號：2678） （於開曼群島註冊成立之有限公司） 截至二零二三年十二月三十一日止年度之 全年業績公佈 | --- | --- | |------------------------------------|-------| | | | | 財務摘要 | | | • 收入下跌 4.5% 至人民幣 227 億元 | | | • 毛利率下跌 5.2 個百分點至 6.4% | | | • 淨虧損為人民幣 2.994 億元 | | | • 股東應佔虧損為人民幣 3.757 億元 | | | • 每股基本虧損為人民幣 0.41 元 | | 天虹國際集團有限公司（「本公司」）董事（「董事」）會（「董事會」）提呈本公司及其附屬公司 （統稱「本集團」）截至二零二三年十二月三十一日止財政年度之經審核綜合業績，連同二 零二 ...

Total Assets and Liabilities - Total assets decreased to RMB 24.48 billion as of 30 June 2023, compared to RMB 26.15 billion as of 31 December 2022[7] - Non-current assets increased slightly to RMB 12.60 billion as of 30 June 2023, up from RMB 12.52 billion as of 31 December 2022[7] - Current assets decreased to RMB 11.88 billion as of 30 June 2023, down from RMB 13.63 billion as of 31 December 2022[7] - Total equity decreased to RMB 9,435,212,000 from RMB 10,101,476,000, a decline of 6.6%[8] - Non-current liabilities increased to RMB 4,812,622,000 from RMB 3,882,939,000, a rise of 23.9%[8] - Current liabilities decreased to RMB 10,234,701,000 from RMB 12,166,884,000, a reduction of 15.9%[9] - Total equity increased from RMB 10,600,952 thousand in 2022 to RMB 11,202,692 thousand in 2023, reflecting a growth of 5.7%[18] - Total liabilities of the Group were 15,047,323 thousand RMB, with segment liabilities at 13,006,620 thousand RMB[70] - Total borrowings increased to RMB 9,237,131,000 as of 30 June 2023, up from RMB 8,543,372,000 at the end of 2022[161] Revenue and Profitability - Revenue for the six months ended 30 June 2023 was RMB 10,794,419,000, a decrease of 17.1% compared to RMB 13,020,846,000 in the same period in 2022[10] - Gross profit fell sharply to RMB 256,745,000 from RMB 2,567,797,000, a decline of 90%[10] - Operating loss was RMB 445,099,000 compared to an operating profit of RMB 1,381,863,000 in the same period last year[10] - Net loss for the period was RMB 740,178,000, compared to a net profit of RMB 1,024,444,000 in the same period in 2022[10] - Basic loss per share was RMB 0.81, compared to earnings per share of RMB 1.08 in the same period last year[12] - Total comprehensive loss for the period was RMB 667,764,000, compared to a comprehensive income of RMB 1,051,185,000 in the same period in 2022[16] - Comprehensive income for the six months ended 30 June 2023 was a loss of RMB 740,178 thousand, compared to a profit of RMB 1,024,444 thousand in the same period in 2022[19] - Total revenue from external customers for the six months ended 30 June 2023 was RMB 10,794,419 thousand[62] - Segment results for the six months ended 30 June 2023 showed a loss of RMB 740,178 thousand[62] - Operating profit for the period was 1,381,983 thousand RMB, reflecting strong operational performance[67] - Profit for the period stood at 1,004,464 thousand RMB, indicating solid profitability[67] Cash Flow and Financing - Net cash flows generated from operating activities decreased significantly from RMB 770,307 thousand in 2022 to RMB 196,344 thousand in 2023[20] - Net cash flows used in investing activities decreased from RMB 1,434,812 thousand in 2022 to RMB 264,048 thousand in 2023[20] - Net cash flows used in financing activities were RMB 351,722 thousand in 2023, compared to net cash flows generated of RMB 247,677 thousand in 2022[21] - Cash and cash equivalents at the end of the period decreased slightly from RMB 2,088,579 thousand in 2022 to RMB 2,085,531 thousand in 2023[21] - Proceeds from borrowings increased from RMB 4,174,836 thousand in 2022 to RMB 7,891,621 thousand in 2023[21] - Dividends paid in 2022 amounted to RMB 447,492 thousand, while no dividends were paid in 2023[21] - The weighted average effective interest rate rose to 4.25% in June 2023, compared to 2.93% in December 2022[167] - Undrawn borrowing facilities stood at approximately RMB 2,245,667,000 as of 30 June 2023, slightly down from RMB 2,299,757,000 at the end of 2022[167] Inventory and Receivables - Inventories decreased to RMB 6.41 billion as of 30 June 2023, compared to RMB 7.59 billion as of 31 December 2022[7] - Trade and bills receivables increased to RMB 411.04 million as of 30 June 2023, up from RMB 340.80 million as of 31 December 2022[7] - Inventory decreased from RMB 8,194,991,000 in 2022 to RMB 6,823,569,000 in 2023, with a provision for write-down of inventories reducing from RMB 604,886,000 to RMB 416,974,000[120] - Trade and bills receivables decreased slightly from RMB 1,378,569,000 in 2022 to RMB 1,342,118,000 in 2023, with a provision for impairment reducing from RMB 15,423,000 to RMB 17,791,000[134] - Trade and bills receivables as of 30 June 2023 amounted to RMB 1,324,327,000, a decrease from RMB 1,363,146,000 as of 31 December 2022[139] - The provision for impairment of trade and bills receivables was RMB 17,791,000 as of 30 June 2023, compared to RMB 15,423,000 as of 31 December 2022[139] - Prepayments, deposits, and other receivables as of 30 June 2023 totaled RMB 1,080,288,000, down from RMB 1,326,609,000 as of 31 December 2022[142] Property, Plant, and Equipment - Property, plant, and equipment decreased to RMB 9.51 billion as of 30 June 2023, compared to RMB 9.61 billion as of 31 December 2022[7] - Investment properties increased to RMB 348.16 million as of 30 June 2023, up from RMB 268.89 million as of 31 December 2022[7] - Right-of-use assets increased to RMB 1.65 billion as of 30 June 2023, compared to RMB 1.58 billion as of 31 December 2022[7] - Property, plant, and equipment closing net book amount as of 30 June 2023 was RMB 9,506,379, with depreciation of RMB 508,124 and currency translation differences of RMB 34,732[77] - Investment properties closing net book amount as of 30 June 2023 was RMB 348,158, with depreciation of RMB 11,960 and currency translation differences of RMB 2,962[80] - Right-of-use assets as of 30 June 2023 totaled RMB 1,651,422, with land use rights at RMB 1,365,578, buildings and warehouses at RMB 259,127, and equipment and others at RMB 26,717[87] - Lease liabilities as of 30 June 2023 were RMB 310,503, with current liabilities at RMB 57,492 and non-current liabilities at RMB 253,011[87] - Depreciation of right-of-use assets for the six months ended 30 June 2023 was RMB 50,575, with land use rights at RMB 17,234, buildings and warehouses at RMB 29,478, and equipment and others at RMB 3,863[91] - Intangible assets closing net book amount as of 30 June 2023 was RMB 63,586, with amortisation charges of RMB 1,831[94] - Rental income from operating leases for investment properties was RMB 20,277 for the six months ended 30 June 2023[83] - No property, plant, and equipment were pledged as of 30 June 2023 and 31 December 2022[77] - No finance cost was capitalised as part of property, plant, and equipment for the six months ended 30 June 2023, compared to RMB 30,839,000 in the same period in 2022[77] Investments and Joint Ventures - The total investments accounted for using the equity method as of 30 June 2023 were RMB 334,906 thousand, with associates contributing RMB 330,529 thousand and joint ventures contributing RMB 4,377 thousand[96] - The share of losses from associates and joint ventures for the six months ended 30 June 2023 was RMB 29,168 thousand, compared to RMB 1,979 thousand in the same period in 2022[97] - The opening amount of investments in associates as of 1 January 2023 was RMB 355,774 thousand, with a share of losses of RMB 29,279 thousand and a closing amount of RMB 330,529 thousand as of 30 June 2023[100] - The company holds a 45% interest in a British Virgin Islands-based investment holding company with an issued share capital of RMB 166,167 thousand[104] - The company holds a 30% interest in a Hong Kong-based investment holding company with an issued share capital of USD 5,000,000[104] - The company holds a 45% interest in a Vietnam-based garment manufacturing company with an issued share capital of VND 39,492,000,000[109] - The company holds a 45% interest in a Vietnam-based garment manufacturing company with an issued share capital of VND 46,580,000,000[109] - The company holds a 45% interest in a Vietnam-based garment manufacturing company with an issued share capital of VND 37,236,800,000[109] - The company holds a 30% interest in a Vietnam-based textile manufacturing company with an issued share capital of USD 5,000,000[109] - The company holds a 30% interest in a Mainland China-based textile manufacturing company with an issued share capital of RMB 23,030,000[112] - The company's investment in joint ventures increased from RMB 4,131,000 in 2022 to RMB 4,377,000 in 2023, with a share of profits rising from RMB 51,000 to RMB 111,000[115] Financial Instruments and Derivatives - Derivative financial instruments increased to RMB 192.65 million as of 30 June 2023, compared to RMB 99.35 million as of 31 December 2022[7] - Derivative financial instruments assets increased to RMB 549,625 thousand as of 30 June 2023, compared to RMB 479,968 thousand as of 31 December 2022[57][58] - Derivative financial instruments liabilities decreased to RMB 24,809 thousand as of 30 June 2023, compared to RMB 142,054 thousand as of 31 December 2022[57][58] - Derivative financial instruments assets increased to RMB 192,652,000 in June 2023, compared to RMB 99,353,000 in December 2022[169] - Derivative financial instruments liabilities decreased to RMB 24,809,000 in June 2023, down from RMB 142,054,000 in December 2022[169] - The cotton option contracts as of 30 June 2023 comprised six contracts with a notional principal amount totaling USD 1,598,000, a decrease from one contract with USD 2,897,000 as of 31 December 2022[171] - Cross currency swap contracts as of 30 June 2023 included six contracts with a notional principal amount totaling RMB 1,046,789,000, down from eight contracts with RMB 1,703,641,000 as of 31 December 2022[171] - Forward foreign exchange contracts as of 30 June 2023 consisted of 124 contracts with a notional principal amount totaling RMB 4,286,891,000, compared to 172 contracts with RMB 6,743,389,000 as of 31 December 2022[171] - The cotton future contract as of 30 June 2023 included one contract with a notional principal amount of USD 16,593,000, a decrease from one contract with USD 32,482,000 as of 31 December 2022[171] Other Financial Information - The company's condensed consolidated financial statements for the six months ended 30 June 2023 were prepared in accordance with HKAS 34, 'Interim Financial Reporting'[24] - The financial statements are presented in Chinese Renminbi (RMB) unless otherwise stated[22] - The company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 9 December 2004[22] - The company adopted International Tax Reform — Pillar Two Model Rules — Amendments to HKAS 12 on 21 July 2023, which provides a temporary mandatory exception for deferred tax accounting for the top-up tax[36] - The amendments to HKAS 12 require the recognition of deferred tax on transactions that give rise to equal amounts of taxable and deductible temporary differences, such as leases and decommissioning obligations[32] - The cumulative effect of recognizing adjustments as of 31 December 2022 was not material, and no adjustment was made to the beginning retained earnings or another component of equity[36] - The company did not change its accounting policies as a result of adopting new and amended standards applicable for the current reporting period[29] - The company is principally engaged in the manufacturing and sales of yarns, grey fabrics, non-woven fabrics, garment fabrics, and garments[22] - The Group is assessing the impact of new accounting standards and interpretations, including HKAS 1 amendments on liability classification and HKFRS 16 amendments on lease liabilities, effective from 1 January 2024[40] - No material changes in financial risk management policies compared to the previous year end[45] - The Group's financial liabilities showed no significant change in contractual undiscounted cash outflows compared to last year end[48] - Fair value estimation for financial instruments includes Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[51] - The Group holds forward foreign exchange contracts, cross currency swaps, cotton futures, cotton options, and bills receivables, all fair valued using active market rates[52] - Financial assets and liabilities measured at fair value as of 30 June 2023 and 31 December 2022 are presented in detail[53] - Revenue from external customers in Asia accounted for 91.3% of the Group's total revenue for the six months ended 30 June 2023, up from 88.6% in the same period in 2022[59] - Revenue from external customers in the Americas accounted for 8.0% of the Group's total revenue for the six months ended 30 June 2023, down from 10.6% in the same period in 2022[59] - The Group's operating segments are assessed based on revenue and operating profit, with a focus on product and geographical perspectives[59] - The Group's geographical segments include China (Mainland China, Hong Kong, and Macao), Southeast Asia (Vietnam and Cambodia), and the Americas (United States, Mexico, Nicaragua, and Honduras)[59] - Total revenue from external customers reached 8,720,552 thousand RMB, with China contributing the majority at 11,725,485 thousand RMB[66] - Depreciation and amortization expenses for the six months ended 30 June 2023 amounted to RMB 572,400 thousand[62] - Depreciation and amortization expenses totaled 400,350 thousand RMB, impacting net income[67] - Total segment assets as of 30 June 2023 amounted to 23,660,456 thousand RMB, with China holding 9,042,045 thousand RMB[70] - Additions to non-current assets were 572,630 thousand RMB, with significant investments in China and Southeast Asia[70] - Freehold land's closing net book amount as of 30 June 2023 was 141,478 thousand RMB, reflecting a decrease from the previous year[73] - Currency translation differences for freehold land amounted to 2,591 thousand RMB, affecting the net book value[73] - The Group's total assets as of 31 December 2022 were 26,151,788 thousand RMB, showing a strong asset base[71] - The total consideration for the sale and purchase of Great Triumph Investments Limited was RMB 810,387,000, with RMB 146,000,000 disclosed as other receivables and long-term receivables as of 30 June 2023[145][146] - Supply chain financing as of 30 June 2023 amounted to RMB 222,236,000, guaranteed by certain subsidiaries, down from RMB 426,093,000 as of 31 December 2022[173][175] - The Group's supply chain financing is repayable within 1 year as of 30 June 2023[174] - The Company's share option scheme allows for the issuance of shares up to 30% of the ordinary shares issued from time to time, with options granted to executive directors at subscription prices of HKD 8.7 and HKD 5.7 per share[182][183] - The fair value of options granted on 23 March 2015 was RMB 17,154,000, and options granted on 28 December 2015 had a fair value of RMB 3,171,000, both determined using the Binomial Option-Pricing Model[186] - The fair value of stock options granted on March 23, 2015, was RMB 17,154,000, and all options have vested with no administrative expense deduction[187] - The fair value of stock options granted on December 28, 2015, was RMB 3,171,000, and all options have vested with no administrative expense deduction[187] - As of June 30, 2023, 3,500,000 options lapsed due to the resignation of a former executive director[188][189] - Total other income for the six months ended June 30, 2023, was RMB 57,284,000, including subsidy income of RMB 20,277

Financial Performance - Revenue decreased by 17.1% to RMB 10.794 billion compared to RMB 13.021 billion in the previous year[2] - Gross margin fell by 17.3 percentage points to 2.4% from the previous year's margin[2] - Net loss amounted to RMB 740.2 million, with a loss attributable to equity holders of RMB 747.2 million[2] - Basic loss per share was RMB 0.81, down from a profit of RMB 1.08 per share in the previous year[3] - The company reported a total comprehensive loss of RMB 667.8 million compared to a profit of RMB 1.051 billion in the previous year[4] - For the six months ended June 30, 2023, total revenue was RMB 10,794,419 thousand, a decrease from RMB 13,020,846 thousand for the same period in 2022, representing a decline of approximately 17%[14] - The company reported a net loss from foreign exchange of RMB 80,316 thousand for the six months ended June 30, 2023, compared to a loss of RMB 111,672 thousand in 2022, showing an improvement[19] - The company reported a basic loss attributable to owners of RMB 747,197,000 for the six months ended June 30, 2023, compared to a profit of RMB 991,972,000 for the same period in 2022, resulting in a basic loss per share of RMB (0.81) versus a profit of RMB 1.08[26] Assets and Liabilities - Total assets decreased to RMB 24.483 billion from RMB 26.151 billion year-on-year[5] - Non-current liabilities increased to RMB 4.813 billion from RMB 3.883 billion in the previous year[7] - Cash and cash equivalents decreased to RMB 2.086 billion from RMB 2.468 billion[5] - The company's asset-liability ratio as of June 30, 2023, was 61%, remaining consistent with the end of the previous year[41] - Accounts payable increased to RMB 666.975 million from RMB 562.329 million year-over-year, while accounts payable and notes payable totaled RMB 3.139 billion, down from RMB 4.597 billion[35] - As of June 30, 2023, the company’s financial assets measured at fair value were RMB 356,973,000, compared to RMB 380,615,000 as of December 31, 2022[31] - The group’s total borrowings increased by RMB 693.8 million to RMB 9.2371 billion as of June 30, 2023, from RMB 8.5434 billion as of December 31, 2022[59] Inventory and Trade Receivables - Inventory decreased to RMB 6.407 billion from RMB 7.590 billion year-on-year[5] - The company's inventory as of June 30, 2023, was RMB 6,823,569,000, a decrease from RMB 8,194,991,000 as of December 31, 2022, with a provision for inventory write-down of RMB (416,974,000)[30] - Trade receivables amounted to RMB 1,060,925,000 as of June 30, 2023, slightly down from RMB 1,090,423,000 as of December 31, 2022, with a provision for impairment of RMB (17,791,000)[32] - The company reported a decrease in trade receivables, with net accounts receivable at RMB 1.324 billion, down from RMB 1.363 billion year-over-year[34] Revenue Breakdown - The group reported that revenue from external customers in Asia accounted for 91.3% of total revenue, while revenue from the Americas accounted for 8.0%[12] - Yarn sales revenue reached approximately RMB 8.0916 billion, a decrease of about 12.4%, with yarn sales accounting for 75.0% of total revenue, up from 71.0% in the same period last year[43] - The sales revenue for fabric reached approximately RMB 245 million, with a gross margin of 4.4%, reflecting a decrease from the previous year[45] - The sales volume of woven fabrics decreased from approximately 64.2 million meters to about 44.3 million meters, resulting in a sales revenue drop of about 22.8% to approximately RMB 1.024 billion[46] - The sales volume of knitted fabrics declined from approximately 8,900 tons to about 7,700 tons, leading to a sales revenue decrease of 19.4% to approximately RMB 401 million[47] - The sales revenue from denim clothing fell to approximately RMB 19.2 million, a significant drop of 95.3% due to the sale of most equity in the Vietnam denim factory[48] - Trade business revenue decreased from approximately RMB 1.097 billion to about RMB 979 million, with a gross margin decline from 6.4% to 5.7%[49] - Non-woven fabric sales revenue increased to approximately RMB 34.1 million, up 31.9% compared to the previous year[51] Operational Challenges - The ongoing geopolitical tensions and rising raw material prices have negatively impacted the textile industry's development and market demand[41] - The company is facing challenges in the market due to low demand for non-essential goods, affecting the textile industry's recovery and profitability[41] - The textile industry in China saw a revenue decline of 4.9% year-on-year, with net profit down 23.8% for the first half of 2023[42] Corporate Governance - The board consists of three executive directors and three independent non-executive directors, adhering to the corporate governance code as per the Stock Exchange's Listing Rules[66] - The audit committee, composed of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, with no disagreements on accounting treatments[69] - The remuneration committee is responsible for formulating the remuneration policies for the board and senior management, ensuring alignment with corporate governance standards[70] - The nomination committee evaluates the board's structure and composition, assessing the independence of non-executive directors and making recommendations for appointments[71] - The environmental, social, and governance committee oversees compliance with relevant laws and regulations related to ESG matters[72] Future Outlook - The group plans to sell approximately 400,000 tons of yarn, 44 million meters of woven fabric, and 5,000 tons of knitted fabric in the second half of 2023[58] - The group aims to optimize its regional product mix and strengthen local supply capabilities to mitigate risks from international trade fluctuations[57] - The group will focus on enhancing or divesting low-efficiency assets to concentrate on core business segments and strengthen industry partnerships for better economies of scale[57] - The company plans to continue optimizing its product mix and developing new products aligned with market trends, focusing on sustainable materials[55]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 23,805,354, a decrease of 10.2% from RMB 26,521,193 in 2021[4] - Gross profit for 2022 was RMB 2,755,622, down 52.9% from RMB 5,851,971 in the previous year[4] - Profit for the year dropped to RMB 201,186, a decline of 92.7% compared to RMB 2,741,616 in 2021[4] - Basic earnings per share decreased to RMB 0.17, down 94.2% from RMB 2.93 in 2021[4] - The Group's revenue for the year ended December 31, 2022, decreased by 10.2% to approximately RMB23.8 billion compared to the previous year[20] - Net profit for the Group was approximately RMB201.2 million, representing a decrease of 92.7% year-over-year[20] - Profit attributable to shareholders of the Company was approximately RMB156.8 million, a decline of 94.2% compared to the previous year[20] - Basic earnings per share decreased significantly to RMB0.17 from RMB2.93 in the previous year[20] Assets and Liabilities - Total assets as of December 31, 2022, increased by 7.0% to RMB 26,151,299 from RMB 24,442,884 in 2021[5] - Total liabilities rose by 16.0% to RMB 16,049,823, compared to RMB 13,841,932 in the previous year[5] - Current ratio decreased to 1.1 in 2022 from 1.3 in 2021, indicating a decline in short-term financial health[6] - Net debt to equity ratio increased to 0.63 in 2022 from 0.45 in 2021, reflecting higher leverage[6] Market and Industry Conditions - The textile industry faced unprecedented challenges in 2022, including high inventory levels and weakened global consumption demand[14] - The overall situation in the Chinese textile industry remains uncertain, but the relaxation of COVID-19 policies is expected to support business operations[16] - The Group aims to leverage its yarn advantages and adopt a regional and platform-based development strategy moving forward[17] Sales and Revenue Breakdown - Revenue from yarn sales, the primary source of the Group's revenue, amounted to approximately RMB17,587.5 million, representing a decrease of 13.8% year-on-year due to weak demand[23] - The sales volume of yarns decreased by approximately 19.7% to about 657,000 tonnes in 2022[24] - Revenue from grey fabrics increased by 23.7% to approximately RMB728.0 million despite a slight decrease in sales volume of 6.5%[26] - Sales revenue of woven garment fabrics increased by 3.0% to approximately RMB2,647.9 million, with a gross profit margin climbing to 24.6%[27] - The sales volume of knitted garment fabrics decreased to approximately 15,000 tonnes, with sales revenue declining by 16.8% to approximately RMB866.4 million[28] Production Capacity and Facilities - As of December 31, 2022, the group operated approximately 4.17 million spindles and over 2,100 weaving and knitting machines[8] - The Group's production facilities are expected to reach approximately 4.4 million spindles by the end of 2022, with ongoing projects including a yarn factory in Turkey and a production base in America[37] Cost and Expenses - The cost of sales rose by 1.8% to RMB21,049.7 million in 2022, with raw materials accounting for approximately 76.2% of total sales costs[54] - Selling and distribution costs decreased by 7.3% to approximately RMB886.4 million, primarily due to reduced freight costs from a significant decrease in yarn sales volume[57] - General and administrative expenses amounted to approximately RMB1,316.1 million, a decrease of 9.3% compared to 2021, representing 5.5% of the Group's revenue[57] Risk Management and Governance - The Group's risk management and internal control framework aligns with the COSO framework, focusing on control environment, risk assessment, control activities, information and communication, and monitoring[1] - The risk management team was established in 2016 and includes key executives from various departments, ensuring comprehensive oversight of risk management practices[170] - The Group emphasizes transparency in governance rules to foster risk awareness and internal control responsibility among employees[1] Corporate Governance - The Group emphasizes high levels of corporate governance, focusing on transparency, accountability, and independence[99] - The Company complied with the applicable code provisions of the Corporate Governance Code during the year ended December 31, 2022[100] - The Board consists of six Directors, including three executive Directors and three independent non-executive Directors, ensuring a balanced governance structure[102] Employee and Workforce Management - The Group's workforce decreased to 30,206 employees as of December 31, 2022, from 33,639 in 2021, indicating a reduction in headcount[72] - The Group's labor-intensive industry requires a relatively high manpower level; effective performance-based incentives and expanded training programs are being implemented to enhance workforce efficiency[96] Environmental and Social Responsibility - The Group has not faced any fines or penalties related to environmental pollution in the past, but future risks may increase due to potential new regulations[98] - The Group has implemented measures such as selective supplier agreements to ensure compliance with environmental protection standards[98] - The Group's investment in clean energy is anticipated to effectively reduce energy costs in the long term[94] Future Outlook and Strategy - The Group plans to rationalize or exit inefficient businesses and enhance middle and back office management efficiency in 2023[17] - The Group targets to sell 750,000 tons of yarns, 110 million meters of woven garment fabrics, and 24,000 tons of knitted garment fabrics in 2023[36] - The Group aims to enhance collaboration in the fabric and non-woven fabric sectors to improve overall product responsiveness and increase sales revenue[39]

Financial Performance - Revenue decreased by 10.2% to RMB 23.805 billion[2] - Gross profit margin fell by 10.5 percentage points to 11.6%[2] - Net profit margin declined by 9.5 percentage points to 0.8%[2] - Shareholders' profit attributable to the company dropped by 94.2% to RMB 156.8 million[3] - Basic earnings per share were RMB 0.17, down from RMB 2.93[3] - Total comprehensive income for the year was RMB 285.672 million, compared to RMB 2.739 billion in the previous year[5] - The company reported a significant decrease in operating profit, down to RMB 601.9 million from RMB 3.423 billion[3] - The overall gross margin for the company decreased from 22.1% in 2021 to 11.6% in 2022, with net profit attributable to shareholders dropping by 94.2% to approximately RMB 156.8 million[45] - Net profit for the year was approximately RMB 201.2 million, a decline of 92.7% year-on-year[41] - Basic earnings per share decreased from RMB 2.93 to RMB 0.17[41] Assets and Liabilities - Total assets increased to RMB 26.151 billion from RMB 24.443 billion[6] - Total liabilities rose to RMB 16.050 billion from RMB 13.842 billion[7] - The total assets of the group as of December 31, 2022, were RMB 24,442,884 thousand[17] - As of December 31, 2022, the total bank borrowings of the group amounted to approximately RMB 8.5434 billion, with RMB 3.4952 billion (40.9%) denominated in RMB, RMB 2.4448 billion (28.6%) in USD, RMB 2.5976 billion (30.4%) in HKD, and RMB 5.8 million (0.1%) in AUD[61] - The outstanding current bank borrowings as of December 31, 2022, were approximately RMB 5.1552 billion, an increase from RMB 3.8317 billion in 2021, primarily due to the restructuring of the debt profile[62] Inventory and Sales - Inventory increased to RMB 7.590 billion from RMB 7.152 billion[6] - The company's inventory turnover days increased to 126 days in 2022 from 95 days in 2021, reflecting a rise in finished goods inventory due to decreased market demand[58] - The company's inventory cost recognized as an expense was RMB 16,420,861,000 in 2022, slightly up from RMB 16,272,629,000 in 2021[30] - The provision for inventory write-downs in 2022 was approximately RMB 495,159,000, a significant increase from RMB 16,177,000 in 2021, indicating potential challenges in inventory management[30] - Yarn sales accounted for about 73.9% of total revenue, with yarn sales revenue declining by 13.8% to approximately RMB 17.5875 billion, driven by a decrease in sales volume[44] - The total yarn sales volume for the year was approximately 657,000 tons, a decrease of about 19.7% compared to the previous year[44] - Fabric sales revenue increased by 23.7% to approximately RMB 728 million despite a slight decline in sales volume of 6.5%[44] Expenses and Costs - The company incurred a total cost of sales, selling and distribution expenses, and general and administrative expenses of RMB 23,252,170 thousand, compared to RMB 23,077,252 thousand in the prior year[19] - Depreciation and amortization expenses for the year amounted to RMB 1,029,050 thousand[13] - Financial expenses net of income were RMB 466,861 thousand, significantly higher than RMB 122,663 thousand in the previous year[20] - The company’s employee benefit expenses decreased to RMB 2,594,979 thousand from RMB 2,888,955 thousand year-over-year[19] - Sales and distribution expenses decreased by 7.3% to approximately RMB 886.4 million, mainly due to reduced freight costs from lower yarn sales volume[55] Strategic Initiatives - The company plans to significantly adjust its organizational management and production structure in response to market changes[40] - The company aims to enhance operational efficiency while streamlining low-efficiency businesses and capacities[40] - The company plans to invest in new yarn and fabric production capacity and equipment upgrades in China, Vietnam, and the Americas[57] - The company is actively pursuing strategic partnerships in the non-woven fabric sector to enhance product responsiveness and increase sales revenue[46] Market and Industry Context - The textile industry in China saw a total revenue of approximately RMB 2.6158 trillion in 2022, a year-on-year decrease of 1.1%[42] - The overall profit for the textile industry was approximately RMB 100.1 billion, down 17.8% year-on-year[42] - The company's revenue for 2022 decreased by 10.2% to approximately RMB 23.8 billion, primarily due to weakened demand in the textile industry[43] Corporate Governance and Compliance - The company’s financial statements are prepared in accordance with the applicable Hong Kong Financial Reporting Standards and are presented in Renminbi[8] - The board consists of three executive directors and three independent non-executive directors, adhering to high standards of corporate governance[69] - The group must comply with several financial covenants related to its borrowings[62] - The company has not engaged in any purchase, sale, or redemption of its listed securities during the year ended December 31, 2022[69] Future Outlook - The company plans to sell 750,000 tons of yarn, 110 million meters of woven fabric, and 24,000 tons of knitted fabric in 2023[46] - The company aims to increase yarn production capacity to approximately 4.4 million spindles by the end of 2022[46] - The global geopolitical situation has necessitated a shift in textile production capacity, which the company has been preparing for over the years[40]

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 13,020,846, an increase from RMB 12,526,280 in the same period of 2021, representing a growth of approximately 3.9%[27] - Gross profit for the period was RMB 2,567,797, compared to RMB 2,852,541 in the prior year, indicating a decrease of about 10%[27] - Profit for the period was RMB 1,024,444, down from RMB 1,321,864 in the previous year, reflecting a decline of approximately 22.5%[28] - Basic earnings per share for profit attributable to owners of the Company was RMB 1.08, compared to RMB 1.41 in the same period last year, a decrease of about 23.4%[28] - Total comprehensive income for the period was RMB 1,051,185, down from RMB 1,323,729 in the same period of 2021, a decrease of approximately 20.5%[30] - Profit attributable to owners of the Company for the six months ended June 30, 2022, was RMB 991,972,000, a decrease of 22.98% from RMB 1,287,620,000 in the same period of 2021[176] - Basic earnings per share for the six months ended June 30, 2022, was RMB 1.08, down from RMB 1.41 in the same period of 2021, reflecting a decline of 23.4%[176] - The Group's revenue increased by approximately 3.9% year-on-year to approximately RMB 13 billion, marking a record high for the Group[198] - Profit attributable to shareholders decreased by 23.0% to approximately RMB 992.0 million during the Review Period[200] Assets and Liabilities - Total assets increased to RMB 26,342,926, up from RMB 24,442,884, representing a growth of 7.8%[20] - Total liabilities increased to RMB 15,140,234 as of December 31, 2022, from RMB 13,841,932 as of June 30, 2022, representing an increase of approximately 9.4%[24] - Total equity attributable to owners of the Company was RMB 11,202,692, a rise of 5.7% from RMB 10,600,952[22] - Current assets totaled RMB 13,937,325, compared to RMB 13,048,619, reflecting an increase of 6.8%[20] - Non-current assets, including property, plant, and equipment, reached RMB 9,642,869, up from RMB 9,229,119, indicating a growth of 4.5%[20] - Total segment assets as of June 30, 2022, amounted to RMB 25,925,079,000, with unallocated assets of RMB 5,230,000[67] - Total liabilities of the Group as of June 30, 2022, were RMB 15,140,234,000, reflecting a significant financial position[67] Cash Flow and Investments - Cash generated from operations for the first half of 2022 was RMB 978,067,000, with net cash flows from operating activities amounting to RMB 770,307,000[38] - The company incurred net cash outflows from investing activities of RMB 1,434,812,000, primarily due to purchases of property, plant, and equipment totaling RMB 1,047,400,000[38] - Financing activities generated net cash inflows of RMB 247,677,000, with proceeds from borrowings amounting to RMB 4,174,836,000[41] - The total cash payment for leases during the six months ended June 30, 2022, was RMB 35,286,000, compared to RMB 33,115,000 for the same period in 2021[79] - The addition to non-current assets for the first half of 2022 was RMB 634,763,000, indicating ongoing investment in growth[67] Market and Operational Strategy - The company is focusing on expanding its market presence and enhancing product development strategies[19] - Future outlook includes continued investment in new technologies and potential acquisitions to drive growth[19] - The company plans to continue expanding its market presence and investing in new technologies to enhance production efficiency[43] - The Group's revenue from external customers in Asia and Americas accounted for 88.6% and 10.6% of total revenue, respectively, for the six months ended 30 June 2022[58] - The demand in the textile industry in China slowed down in the first half of the year due to the COVID-19 pandemic and related policies[198] - The production and operating costs for plants increased, impacting the Group's profitability compared to the previous year[200] - The Group faced challenges from the Russia-Ukraine crisis and high inflation rates, leading to a decline in textile industry demand, especially in Q2[198] Financial Risks and Management - The Group's activities expose it to various financial risks, including foreign exchange risk, price risk, cash flow and fair value interest rate risk, credit risk, and liquidity risk[50] - The Group's liquidity risk management has shown no significant changes compared to the previous year[50] - The Group's risk management policies have remained unchanged since the end of the last year[50] - The Group's financial statements do not include all financial risk management information and disclosures required in the annual financial statements[50] Shareholder Information - A final dividend of RMB 447,492,000 was paid in June 2022, compared to RMB 150,461,000 in 2021, indicating a significant increase[183] - An interim dividend of HKD 0.38 per share was proposed, amounting to RMB 298,328,000, down from RMB 381,518,000 in 2021[183] - The total issued and fully paid ordinary shares were 918,000 thousands, with a share premium of RMB 462,059, resulting in a total of RMB 559,017 as of June 30, 2022[143] - The average exercise price of outstanding options as of June 30, 2022, was HKD 8.27, with 3,500 thousands of options remaining[153] Taxation - Current tax on profits for the period was RMB 192,615,000, a decrease from RMB 300,055,000 in 2021[165] - Six subsidiaries in Mainland China were entitled to a preferential tax rate of 15% during the period, compared to eleven subsidiaries in the same period of 2021[165] - The Company's subsidiaries in Vietnam are entitled to a preferential income tax rate of 15% for 12 years, with initial investments exempt from income taxes for three years[171] - The income tax rate for the Company's subsidiary in Nicaragua is 30%, but it was exempt from profits tax during the period[171] Inventory and Receivables - The company reported a significant increase in inventories, which rose to RMB 7,321,290 from RMB 7,151,667, an increase of 2.4%[20] - The trade receivables as of June 30, 2022, were RMB 2,036,166,000, compared to RMB 1,293,965,000 as of December 31, 2021, indicating a significant increase of approximately 57.3%[105] - The provision for impairment for trade receivables was RMB 2,747,370,000 as of June 30, 2022, compared to RMB 2,030,987,000 as of December 31, 2021, reflecting an increase of approximately 35.3%[105] - The total prepayments, deposits, and other receivables netted RMB 1,067,888,000 as of June 30, 2022, compared to RMB 890,817,000 as of December 31, 2021, marking an increase of around 19.9%[112]

Financial Performance - For the year ended December 31, 2021, the Group's revenue reached RMB 26.52 billion, representing a year-on-year increase of 35.5%[4] - The gross profit for the year was RMB 5.85 billion, a significant increase of 116.2% compared to the previous year[4] - Profit attributable to shareholders rose to RMB 2.69 billion, marking a 419.3% increase from the prior year[4] - The annual sales volume of yarns reached over 810,000 tonnes, achieving stable growth compared to last year[16] - Revenue from the sale of garment fabrics increased by 51.7% to RMB 3.61 billion[16] - The gross profit margin for the yarn business rose by 9.9 percentage points to 23.3% compared to the previous year[16] - The Group's revenue for 2021 increased by 35.5% to approximately RMB 26.5 billion, achieving record high figures[22] - Profit attributable to shareholders soared to approximately RMB 2.69 billion, a fourfold increase compared to the previous year[22] - Yarn sales accounted for approximately 76.9% of total revenue, amounting to approximately RMB 20.4 billion, representing a substantial increase of 34.2%[25] - The overall gross profit margin of the Group improved significantly by 8.3 percentage points from 13.8% last year to 22.1% for the year[33] Operational Highlights - The Group has over 5,000 customers globally, with a sales network spanning multiple regions including China, Vietnam, and North America[9] - The sales volume of woven garment fabrics increased from approximately 88 million meters to 137 million meters, with a gross profit margin climbing to 23.1%[29] - The knitted garment fabrics sales volume was approximately 18,000 tonnes, a modest increase of 1,800 tonnes over the previous year, with a gross profit margin of around 16%[30] - The Group plans to invest approximately RMB 2.0 billion in fixed assets in 2022, targeting sales of 880,000 tonnes of yarns, 180 million meters of woven garment fabrics, and 28,000 tonnes of knitted garment fabrics[37] - The Group's internal use of grey fabrics increased, while external sales decreased from approximately 66 million meters to nearly 53.8 million meters, with a gross profit margin of 29.7%[27] Financial Position - Total assets as of December 31, 2021, were RMB 24.44 billion, reflecting a 21.3% increase from the previous year[5] - The Group's net current assets increased by 124.8% to RMB 2.96 billion[5] - The return on equity for the year was 30%, a significant increase from 7% in the previous year[6] - As of December 31, 2021, total bank borrowings increased by RMB 151.9 million to RMB 7,215.0 million, with current borrowings decreasing by RMB 5.8 million to RMB 3,831.7 million[67][70] - The current ratio as of December 31, 2021, was 1.29, and the debt to equity ratio was 0.72, indicating the Group's financial leverage and liquidity position[69] Risk Management - The Group plans to enhance its operational capabilities and adopt risk management measures in response to high raw material prices and exchange rate fluctuations[20] - The Group has hedged about half of its foreign currency exposure through currency option contracts and currency swaps to mitigate foreign exchange risks[72] - The Group's exposure to foreign exchange risk is mainly from borrowings and raw material procurement denominated in US$ or HK$[73] - The Group is subject to operational risks due to the concentration of its business in the textile industry, which is affected by global COVID-19 impacts and uncertainties in export policies towards China[80] - The risk management and internal controls framework aims to enhance long-term shareholder value by identifying and assessing risk exposures[166] Corporate Governance - The Board comprises four executive Directors and three independent non-executive Directors, ensuring a balance of power and independence[110] - The Company has complied with the Corporate Governance Code provisions during the year ended December 31, 2021[110] - The Board meets regularly to discuss overall strategy and financial performance, holding four Board meetings and one general meeting during the year[115] - The company has established various committees, including the Remuneration Committee, Audit Committee, Nomination Committee, and ESG Committee, to ensure effective governance[130] - The Board adopted a Board Diversity Policy on August 5, 2013, aiming for diversity in Board appointments, including gender diversity[159] Human Resources - The Group had a total workforce of 33,639 employees, down from 38,545 employees at the end of 2020, due to the sale of a spinning mill and a majority interest in a jeanswear production plant[75] - The Group is committed to optimizing its human resources structure and providing competitive remuneration packages based on market conditions and employee performance[75] - The Group plans to continue enhancing its training and development programs to foster a skilled and motivated workforce[75] - The Group has implemented performance-based unit counts and expanded staff training to enhance workforce efficiency and capability[106] Environmental and Social Responsibility - The Group has not faced any fines or penalties related to environmental pollution in the past, but future regulatory changes may require substantial expenditures to upgrade environmental protection facilities[109] - The increase in the number of factories has heightened the risk associated with environmental governance, as governments tighten controls over environmental protection[109] - The ESG Committee's major roles include formulating and reviewing policies on environmental protection, corporate governance, and corporate social responsibility[146] - The company aims to ensure compliance with environmental protection, corporate governance, and corporate social responsibility policies[151]