Financial Performance - In 2024, China Weaving Materials Holdings Limited achieved a yarn sales volume increase of 5.4% to 101,534 tons, with revenue growth of 15.8% to RMB 1.282 billion, benefiting from improved market conditions and product structure optimization [8]. - The company's gross profit was RMB 42.2 million, with an operating profit of approximately RMB 5.1 million, but it reported a net loss of RMB 11.74 million due to significant pricing pressure in the industry [8]. - The group recorded a net loss of approximately RMB 11,741,000 for the year ending December 31, 2024 [117]. - The net loss for the year was RMB 11,741 thousand, reduced from a loss of RMB 26,523 thousand in the previous year, showing a positive trend [154]. - The company reported a total comprehensive loss of RMB 11,741 thousand for the year, down from RMB 26,523 thousand in the previous year, suggesting a recovery trend [157]. - The company achieved a net cash inflow from operating activities of RMB 80,467,000, a substantial recovery from a net cash outflow of RMB 80,106,000 in 2023 [158]. - The basic loss per share improved to RMB 0.94 in 2024 from RMB 2.12 in 2023, indicating better performance on a per-share basis [154]. - The company reported a pre-tax loss of RMB 13,817,000 for the year ended December 31, 2024, significantly improved from a loss of RMB 41,598,000 in 2023, representing a reduction of approximately 66.8% [158]. Production and Capacity - The modernization plan at Jiangxi Jinyuan Textile Co., Ltd. has progressed as scheduled, with a new workshop with a capacity of 50,000 spindles now fully operational, enhancing production efficiency [9]. - The company maintains a total production capacity of approximately 760,000 spindles, focusing on the development of polyester-cotton blended yarn products [9]. - The company plans to focus on polyester-cotton yarn products, particularly polyester combed cotton yarn, which has higher entry barriers and better profit margins compared to polyester yarn products [14]. - The company has suspended production in one of its workshops for renovation and evaluation, aiming to enhance efficiency with the latest production technology [14]. Market Outlook - The outlook for 2025 remains challenging, with ongoing geopolitical tensions and a weak export market, despite signs of recovery in the domestic retail market [9]. - The textile industry continues to face challenges, with domestic retail sales growth slowing to approximately 2.9% in 2024, significantly lower than the 12.9% growth in 2023 [15]. - The textile industry is expected to face challenges in 2024 due to ongoing geopolitical conflicts and high inflation, impacting global demand and consumer confidence [33]. Financial Position - Cash and bank balances were approximately RMB 209.1 million as of December 31, 2024, compared to RMB 190.1 million as of December 31, 2023 [26]. - Interest-bearing borrowings were approximately RMB 412.7 million as of December 31, 2024, down from RMB 476.2 million as of December 31, 2023 [27]. - The debt-to-asset ratio was approximately 34.6% as of December 31, 2024, compared to 36.7% as of December 31, 2023 [28]. - Current liabilities exceeded current assets by approximately RMB 195,924,000, indicating significant uncertainty regarding the group's ability to continue as a going concern [117]. - The company's net asset value decreased to RMB 676,792 thousand in 2024 from RMB 688,533 thousand in 2023, reflecting a decline in equity [156]. Governance and Compliance - The company has established a remuneration committee, nomination committee, and audit committee to ensure effective governance and oversight [100]. - The board consists of one executive director, one non-executive director, and three independent non-executive directors, ensuring compliance with listing rules regarding board composition [96]. - The independent non-executive directors exceed one-third of the board members, meeting the requirements of the listing rules [97]. - The company has adopted a code of conduct for securities trading by directors, confirming compliance for the year ending December 31, 2024 [94]. - The audit report for the financial statements for the year ending December 31, 2024, was conducted by a specific accounting firm, which will be proposed for reappointment at the upcoming annual general meeting [90]. Risk Management - The board is committed to maintaining an appropriate risk management and internal control system to minimize risks and ensure compliance with relevant laws and regulations [121]. - The company faced foreign exchange risks primarily related to USD and HKD, with foreign currency assets and liabilities valued at approximately RMB 5.9 million and RMB 5.7 million, respectively, as of December 31, 2024 [29]. Shareholder Information - The company does not recommend the distribution of a final dividend for the year ended December 31, 2024 [48]. - The company's distributable reserves as of December 31, 2024, are approximately RMB 720 million [55]. - The company has maintained a minimum of 25% of its issued share capital held by the public since its listing [86]. Audit and Financial Reporting - The independent auditor's report confirmed that the consolidated financial statements present a true and fair view of the group's financial position as of December 31, 2024 [138]. - The group has been audited in accordance with the Hong Kong auditing standards, ensuring compliance with professional ethical responsibilities [139]. - The audit procedures included understanding management's control processes regarding impairment assessments and evaluating the qualifications and independence of external valuers [142]. Employee Relations - The group has established multiple employee benefit plans, including basic retirement pensions and medical insurance, in compliance with regulations in China and Hong Kong [81]. - The group has maintained harmonious relationships with employees and suppliers [44][46].

Financial Performance - The company's revenue for the fiscal year ending December 31, 2024, was RMB 1,282,266,000, representing a 15.8% increase from RMB 1,107,045,000 in the previous year[2] - Gross profit increased significantly to RMB 42,205,000 from RMB 11,263,000, indicating a substantial improvement in profitability[2] - The operating profit turned positive at RMB 5,095,000 compared to an operating loss of RMB 20,202,000 in the previous year[2] - The net loss for the year was RMB 11,741,000, a reduction from a loss of RMB 26,523,000 in the prior year, showing progress in financial performance[2] - The company reported a net loss attributable to shareholders of RMB 11,741,000 for the year ended December 31, 2024, compared to a loss of RMB 26,523,000 in 2023, representing a 55.7% improvement in losses year-over-year[27] - The company did not recommend the distribution of a final dividend for the fiscal year ending December 31, 2024[25] - Basic loss per share improved from approximately 2.12 cents to about 0.94 cents[49] Assets and Liabilities - Current liabilities exceeded current assets by RMB 195,924,000, raising concerns about the company's liquidity and going concern status[5] - Non-current assets decreased to RMB 909,274,000 from RMB 987,263,000, primarily due to a reduction in property, plant, and equipment[3] - Total liabilities decreased from RMB 712,045,000 to RMB 684,620,000, reflecting a slight improvement in the company's financial position[3] - The company's total liabilities exceeded its current assets by approximately RMB 195,924,000 as of December 31, 2024, indicating significant liquidity concerns[34] - As of December 31, 2024, the company's interest-bearing borrowings amounted to approximately RMB 412.7 million, a decrease from RMB 476.2 million as of December 31, 2023[51] - The company's debt-to-asset ratio was approximately 34.6% as of December 31, 2024, down from 36.7% a year earlier[52] Revenue and Sales - The company's revenue from yarn sales for the fiscal year 2024 was RMB 1,282,266,000, an increase of 15.8% compared to RMB 1,107,045,000 in 2023[19] - The sales volume of yarn products increased by approximately 5.4% from about 96,330 tons in the previous year to about 101,534 tons in the current year[40] - Yarn product sales revenue rose by 15.8% to approximately RMB 1.282 billion in 2024 from about RMB 1.107 billion in 2023[37] - The average selling price of yarn products rose by 9.9% from approximately RMB 11,492 per ton to about RMB 12,629 per ton[40] Other Income and Expenses - Total other income for the fiscal year 2024 was RMB 38,029,000, a decrease of 11.1% from RMB 42,742,000 in 2023[20] - The cost of goods sold for the fiscal year 2024 was RMB 1,240,061,000, up from RMB 1,095,782,000 in 2023[24] - Interest expenses for bank and other borrowings were RMB 18,912,000 in 2024, down from RMB 21,383,000 in 2023[20] - The company experienced a net foreign exchange loss of RMB 672,000 in fiscal year 2024, compared to a loss of RMB 181,000 in 2023[20] - Other income decreased by approximately RMB 4.7 million or 11.0%, from about RMB 42.7 million to approximately RMB 38 million[42] Market and Strategic Outlook - The company is closely monitoring government policies and market conditions to adjust its product mix and sales strategies accordingly[7] - The company plans to focus on polyester-cotton yarn products in 2024, particularly polyester combed cotton yarn, which has higher entry barriers and better profit margins[41] - The company has adjusted its product mix by gradually reducing the production and sales of viscose and stretch core viscose yarn products, with a complete cessation planned for 2024[40] - The global economic environment remains challenging, with China's GDP growth projected at 5.0% for 2024, slightly down from 5.2% in 2023, due to domestic demand slowdown and global trade uncertainties[34] - The textile industry faces challenges due to ongoing geopolitical conflicts and high inflation, impacting global demand and consumption[57] - The company plans to closely monitor market conditions and adjust inventory levels, production capacity, product mix, and pricing strategies accordingly[58] Compliance and Reporting - The adoption of new and revised international financial reporting standards did not have a significant impact on the company's consolidated financial statements[10] - The company is currently assessing the impact of new and revised International Financial Reporting Standards on its consolidated financial statements[12] - The group confirmed that the financial statements for the year ending December 31, 2024, are consistent with the draft consolidated financial statements[66] - The annual performance announcement will be published on the Hong Kong Stock Exchange website and the company's website[67] - The annual report will include all information required by listing rules and will be sent to shareholders at the appropriate time[67] Employment and Workforce - The total number of employees was 2,410 as of December 31, 2024, a slight decrease from 2,422 employees a year prior[55] Miscellaneous - The company had no contingent liabilities as of December 31, 2024[54] - The company has not made any significant investments or acquisitions during the year ended December 31, 2024[56] - The company has not used any financial instruments to hedge foreign exchange risks as of December 31, 2024[53] - The company will hold its annual general meeting on June 5, 2025[59]

中 國 織 材 控 股 有 限 公 司 (於 開 曼 群島 註 冊 成 立 的 有 限 公 司) 股份代號：3778 2024 中期報告 目 錄 | --- | --- | |-------|------------------------------| | | | | 2 | 公司資料 | | 4 | 管理層討論與分析 | | 10 | 企業管治及其他資料 | | 14 | 簡明綜合損益及其他全面收益表 | | 15 | 簡明綜合財務狀況表 | | 17 | 簡明綜合權益變動表 | | 18 | 簡明綜合現金流量表 | | 19 | 簡明綜合財務資料附註 | 公司資料 | --- | --- | |----------------------------------|-------------------------------------| | 董事會（「董事會」） | 公司秘書 | | 執行董事 | 張志輝先生 | | 鄭永祥先生 | 授權代表 | | 非執行董事 鄭洪先生 （主席） | 鄭洪先生 | | | 張志輝先生 | | 獨立非執行董事 黃德盛先生 | 註冊辦事處 | | 許貽良先生 李國興先生 ...

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 577,898,000, an increase of 26.8% compared to RMB 455,663,000 for the same period in 2023[1] - Gross profit for the same period was RMB 25,087,000, compared to RMB 8,980,000 in 2023, reflecting a significant improvement[1] - The net loss for the six months was RMB 3,048,000, a reduction from a net loss of RMB 9,617,000 in the previous year, indicating improved financial performance[1] - Other income for the six months ended June 30, 2024, was RMB 12,896 thousand, down from RMB 16,662 thousand in the same period of 2023, a decrease of about 22.0%[13] - The group incurred a net loss of RMB 3,048 thousand for the six months ended June 30, 2024, compared to a net loss of RMB 9,617 thousand for the same period in 2023, indicating an improvement in performance[20] - The company's gross profit for the six months ended June 30, 2024, was approximately RMB 25.1 million, with a loss attributable to the company of approximately RMB 3 million[26] - Gross profit increased from approximately RMB 9 million for the six months ended June 30, 2023, to approximately RMB 25.1 million for the same period in 2024, with the gross profit margin rising from 2.0% to 4.3%[28] - The net loss attributable to the company's owners decreased from approximately RMB 9.6 million to approximately RMB 3 million, a reduction of about RMB 6.6 million or 68.3%[35] - The company's basic loss per share decreased from approximately RMB 0.77 to approximately RMB 0.24, a reduction of about RMB 0.53 or 68.3%[36] Liquidity and Cash Flow - Current liabilities exceeded current assets by approximately RMB 153,058,000 as of June 30, 2024, raising concerns about the company's liquidity[4] - The company recorded an operating cash outflow of approximately RMB 28,009,000 during the six months, highlighting cash flow challenges[4] - The company has secured bank confirmations to renew short-term bank loans amounting to approximately RMB 40,000,000, which is crucial for its working capital needs[4] - As of June 30, 2024, the group had cash and bank balances, other receivables, and other payables, with foreign currency assets and liabilities valued at approximately RMB 2.4 million and RMB 5.3 million respectively[41] - The group had no contingent liabilities as of June 30, 2024[42] Assets and Liabilities - Non-current assets totaled RMB 948,263,000 as of June 30, 2024, a decrease from RMB 987,263,000 at the end of 2023[2] - Inventory increased to RMB 276,889,000 from RMB 224,222,000, indicating a potential buildup of stock[2] - The company’s total equity attributable to owners was RMB 685,485,000, slightly down from RMB 688,533,000 at the end of 2023[3] - Trade payables amounted to RMB 40,061 thousand as of June 30, 2024, compared to RMB 13,606 thousand as of December 31, 2023[24] - The group’s total trade and other receivables decreased to RMB 39,150 thousand as of June 30, 2024, from RMB 31,340 thousand as of December 31, 2023[21] Sales and Production - The group reported revenue from yarn sales of RMB 577,898 thousand for the six months ended June 30, 2024, compared to RMB 455,663 thousand for the same period in 2023, representing an increase of approximately 26.8%[11] - The company's yarn product sales volume increased by 26.2% from approximately 38,911 tons for the six months ended June 30, 2023, to approximately 49,113 tons for the six months ended June 30, 2024[26] - The company's yarn production increased by 14.7% from approximately 43,576 tons for the six months ended June 30, 2023, to approximately 50,000 tons for the six months ended June 30, 2024[26] - The group’s interest income decreased to RMB 1,642 thousand for the six months ended June 30, 2024, from RMB 3,448 thousand in the same period of 2023, a decline of approximately 52.4%[13] Expenses - Distribution and selling expenses decreased from approximately RMB 10.4 million to approximately RMB 9.4 million, a reduction of about RMB 1 million or 9.8%[31] - Administrative expenses decreased from approximately RMB 25.4 million to approximately RMB 21.1 million, a reduction of about RMB 4.3 million or 17.0%[32] - Financial costs decreased from approximately RMB 11 million to approximately RMB 10.2 million, a reduction of about RMB 800,000 or 7.2%[33] - The group’s depreciation expense for owned properties, plants, and equipment was RMB 38,114 thousand for the six months ended June 30, 2024, compared to RMB 36,439 thousand for the same period in 2023, an increase of about 4.6%[17] Market Conditions and Strategy - The global economic environment remains challenging, with inflation and rising interest rates impacting demand and consumption[25] - The textile industry faces challenges due to ongoing geopolitical conflicts and high inflation, which suppress global demand and consumption[45] - The company anticipates that the Chinese economy will remain resilient and continue to grow in the second half of 2024, despite a weak export market and uncertain domestic consumer confidence[45] - The company plans to continue assessing the impact of government policies and market conditions on its operations to ensure sufficient cash flow generation[5] - The company has ceased production and sales of viscose yarn and elastic core viscose yarn products as of 2024, focusing on polyester-cotton blended yarn products instead[26] - The company is actively adjusting its product mix and production arrangements in response to market conditions, while also enhancing marketing efforts and adopting aggressive pricing strategies[26] Corporate Governance - The group did not declare an interim dividend for the six months ended June 30, 2024, consistent with the previous year[18] - The board has decided not to declare an interim dividend for the six months ending June 30, 2024[46] - The company has complied with the corporate governance code and has not established an internal audit function, relying instead on existing management oversight[48] - There were no significant investments, acquisitions, or disposals of subsidiaries during the six months ending June 30, 2024[44] - There were no purchases, sales, or redemptions of the company's listed shares during the six months ending June 30, 2024[47] Employment - The total number of employees increased to 2,451 as of June 30, 2024, compared to 2,422 on December 31, 2023[43]

Market Conditions - In 2023, the global textile industry faced significant challenges, with the average prices of crude oil and cotton lower than in 2022, impacting product pricing negatively [8]. - The international cotton price averaged between $0.75 and $0.85 per pound in 2023, remaining lower than in 2022, primarily due to a weak global economy and high interest rates [12]. - The average price of crude oil in 2023 fluctuated between $70 and $80 per barrel, which was lower than in 2022, affecting downstream product prices [12]. - The textile industry faces challenges due to global demand suppression and high inflation, but domestic sales in China are gradually recovering [38]. Company Performance - The company's revenue for the year ending December 31, 2023, was adversely affected by a shift towards mass-market polyester yarn products, which have lower average selling prices and margins [9]. - The company's yarn product sales volume decreased by 6.9% from approximately 103,479 tons in the year ended December 31, 2022, to approximately 96,330 tons in the year ended December 31, 2023 [15]. - Revenue from yarn products fell by 16.0% from approximately RMB 1.318 billion in the year ended December 31, 2022, to approximately RMB 1.107 billion in the year ended December 31, 2023 [15]. - The overall average selling price of yarn products decreased by 17.1% from approximately RMB 12,738 per ton to approximately RMB 10,558 per ton [18]. - Gross profit dropped from approximately RMB 58.1 million in the year ended December 31, 2022, to approximately RMB 11.3 million in the year ended December 31, 2023, with a gross margin decline from 4.4% to 1.0% [19]. - The net loss attributable to the owners of the company was approximately RMB 26.5 million for the year ended December 31, 2023, compared to approximately RMB 12.6 million for the year ended December 31, 2022, resulting in a net loss margin of approximately 2.4% [27]. - Basic loss per share increased to approximately RMB 2.12 for the year ended December 31, 2023, from approximately RMB 0.39 for the year ended December 31, 2022 [29]. - The company recorded a total comprehensive loss of RMB 26,523 thousand for the year, compared to RMB 12,564 thousand in 2022 [179]. Financial Position - Cash and bank balances were approximately RMB 190.1 million as of December 31, 2023, down from RMB 263.4 million as of December 31, 2022 [30]. - Interest-bearing borrowings decreased to approximately RMB 476.2 million as of December 31, 2023, from RMB 515.2 million as of December 31, 2022 [31]. - The debt-to-asset ratio was approximately 36.7% as of December 31, 2023, compared to 38.5% as of December 31, 2022 [32]. - Current liabilities exceeded current assets by approximately RMB 199,261,000 as of December 31, 2023, indicating significant uncertainty regarding the company's ability to continue as a going concern [132]. - Total assets decreased to RMB 1,500,047 thousand from RMB 1,595,307 thousand in 2022, reflecting a decline of approximately 6% [181]. - The company has the financial resources to meet its funding needs and financial obligations for the next 12 months, despite the current challenges [195]. Strategic Adjustments - The company has adjusted its product mix and production arrangements to focus on mass-market products due to weak export markets, leading to increased marketing efforts and an aggressive pricing strategy [9]. - The company anticipates that the U.S. interest rates have peaked in 2023, with potential rate cuts in 2024 expected to improve consumer markets [9]. - The company plans to closely monitor market changes and adjust inventory levels and production capacity to improve product mix and pricing strategies [10]. - The company adjusted its product mix to focus more on mass-market products, particularly polyester yarn, in response to the competitive domestic market [19]. - The company plans to continue evaluating government policies and global financial market changes to adjust its product mix and sales strategies accordingly [196]. Operational Efficiency - The company aims to enhance production efficiency through increased automation and economies of scale, positioning itself to capitalize on future market improvements [10]. - The textile market is expected to remain challenging, but the company is committed to maintaining production safety and improving operational efficiency [10]. - Distribution and selling expenses decreased by approximately RMB 1.4 million or 5.7%, from approximately RMB 24.4 million to approximately RMB 23.0 million, attributed to the decline in yarn product sales volume [23]. - Administrative expenses decreased from RMB 54.5 million for the year ended December 31, 2022, to approximately RMB 50.8 million for the year ended December 31, 2023, a reduction of about RMB 3.7 million or 6.7% [24]. - Financial costs decreased from approximately RMB 22.7 million for the year ended December 31, 2022, to approximately RMB 21.3 million for the year ended December 31, 2023, a reduction of about RMB 1.4 million or 6.2% [25]. Governance and Compliance - The company has established a remuneration committee, nomination committee, and audit committee, ensuring they have sufficient resources to fulfill their duties [114]. - The board consists of one executive director, one non-executive director, and three independent non-executive directors, ensuring compliance with listing rules [108]. - The independent non-executive directors exceed one-third of the board, meeting the requirements of the listing rules [110]. - The company has adopted a code of conduct for securities trading by directors, confirming compliance for the year ended December 31, 2023 [106]. - The group has complied with all relevant environmental laws and regulations, obtaining necessary approvals from regulatory authorities in China [49]. Shareholder Information - The board does not recommend the distribution of a final dividend for the year ended December 31, 2023 [55]. - The group had over 1,800 customers as of December 31, 2023, with sales to the five largest customers accounting for 17.6% of total sales, and sales to the largest customer representing 6.9% of total sales for the year [53]. - The group had over 50 raw material suppliers, with purchases from the five largest suppliers making up 55.3% of total procurement, and purchases from the largest supplier accounting for 15.3% of total procurement for the year [53]. - The company reported a distributable reserve of approximately RMB 750 million as of December 31, 2023 [63]. Audit and Financial Reporting - The independent auditor's report was issued on March 26, 2024, confirming the overall fairness of the consolidated financial statements [176]. - The audit committee is responsible for overseeing the financial reporting process and ensuring the integrity of the financial statements [170]. - The audit report emphasizes the importance of internal controls and the need for adequate disclosures regarding the company's ability to continue as a going concern [173]. - The auditor's fees for the year ending December 31, 2023, amounted to approximately RMB 1,184,000 for audit services and RMB 263,000 for non-audit services [135].

Financial Performance - The company reported a net loss of approximately RMB 26,523,000 for the year ended December 31, 2023, compared to a loss of RMB 4,875,000 in the previous year[30]. - The group reported a loss attributable to owners of the company of approximately RMB 26.5 million for the year ended December 31, 2023, compared to a loss of about RMB 4.9 million for the previous year[51]. - The net loss from continuing operations for the year was RMB 26.5 million, compared to a profit of RMB 4.9 million in the previous year[113]. - The basic loss per share for the year ended December 31, 2023, was approximately RMB 2.12, compared to RMB 0.39 for the year ended December 31, 2022, indicating an increase in net loss[79]. - The group's gross profit decreased from approximately RMB 58.1 million for the year ended December 31, 2022, to approximately RMB 11.3 million for the year ended December 31, 2023, with a gross profit margin dropping from about 4.4% to 1.0%[61]. - The company's revenue for the year ended December 31, 2023, was approximately RMB 1.107 billion, a decrease of about RMB 301.1 million or 22.8% compared to the previous year[98]. Revenue and Sales - Revenue from external customers for the yarn segment was RMB 1,107,045,000, a decrease of 15.9% from RMB 1,318,133,000 in the previous year[17]. - The group's yarn product sales decreased by approximately 6.9% from about 103,479 tons for the year ended December 31, 2022, to about 96,330 tons for the year ended December 31, 2023[31]. - Revenue from yarn products fell by 16.0% from approximately RMB 1.318 billion for the year ended December 31, 2022, to about RMB 1.107 billion for the year ended December 31, 2023[31]. - The overall average selling price of yarn products decreased by 17.1% from approximately RMB 12,738 per ton to about RMB 10,558 per ton[33]. - The revenue from polyester yarn was RMB 434,619,000, accounting for 39.3% of total revenue, while the revenue from polyester-cotton blended yarn and viscose-cotton blended yarn was RMB 349,725,000, accounting for 31.6%[194]. Cash Flow and Liquidity - The company’s operating cash outflow was approximately RMB 80,106,000 for the year, indicating significant cash flow challenges[30]. - The company’s current liabilities exceeded its current assets by approximately RMB 199,261,000, raising concerns about its ability to continue as a going concern[30]. - The company's cash and bank balances decreased from RMB 263.4 million in 2022 to RMB 190.1 million in 2023, a decline of about 27.8%[117]. - The net cash inflow from operating activities was RMB 25,495,000, while the net cash inflow from investing activities was RMB 9,824,000, and the net cash outflow from financing activities was RMB 35,907,000[156]. Expenses and Costs - Depreciation expenses increased to RMB 74,657,000 from RMB 61,845,000, reflecting a rise of 20.5%[22]. - The group's administrative expenses decreased from approximately RMB 54.5 million for the year ended December 31, 2022, to approximately RMB 50.8 million for the year ended December 31, 2023, a reduction of about RMB 3.7 million or 6.7%[63]. - Distribution and sales expenses decreased from RMB 24.4 million for the year ended December 31, 2022, to approximately RMB 23 million for the year ended December 31, 2023, a reduction of about RMB 1.4 million or 5.7%[196]. Market Conditions and Outlook - The outlook suggests that the global economy will continue to be influenced by the outcomes of the Russia-Ukraine conflict and the Gaza conflict, while China's economy is expected to remain resilient and continue to grow due to government stimulus policies[83]. - The textile industry in China is gradually recovering, but the export market remains challenging due to restrictive trade measures from the US and EU[59]. - The domestic textile market in China is showing signs of gradual recovery following the lifting of all pandemic control measures in January 2023[200]. - The export market for high-end textile products to traditional Western markets is expected to remain weak, increasing reliance on the domestic market characterized by intense competition[200]. Discontinued Operations - The company incurred a total loss from discontinued operations of RMB 10,000,000, compared to a loss of RMB 7,689,000 in the previous year[2]. - The group’s total loss from discontinued operations was RMB 7,689,000, which includes adjustments for government grants[130]. - The company has terminated the production and sale of polyester staple fiber as of September 30, 2022, impacting its revenue streams[13]. Other Financial Metrics - Interest income for the year was RMB 5,570,000, up from RMB 4,370,000 in the previous year, representing an increase of 27.4%[14]. - Other income increased by approximately RMB 1.91 million or 81.0%, rising from about RMB 23.6 million to approximately RMB 42.7 million, mainly due to government subsidies and increased waste sales revenue[34]. - Financial costs decreased by approximately RMB 140,000 or 6.2%, from about RMB 22.7 million to approximately RMB 21.3 million, primarily due to reduced bank borrowings and lower interest rates[36]. - The actual income tax credit increased from approximately RMB 4,200,000 to approximately RMB 15,100,000, an increase of about 2.6 times[171]. Employee and Operational Metrics - The group had a total of 2,422 employees as of December 31, 2023, a slight decrease from 2,423 employees as of December 31, 2022[199]. - The group has not used any financial instruments to hedge foreign exchange risks as of December 31, 2023[39]. - The group anticipates further financing through the mortgage of certain properties, plants, and equipment[120].

Financial Performance - The company's revenue for the six months ended June 30, 2023, was approximately RMB 455.7 million, a decrease of 30.0% or RMB 196.1 million compared to the same period in 2022[47]. - The company's gross profit for the six months ended June 30, 2023, was approximately RMB 9 million, down from RMB 86.5 million for the same period in 2022, resulting in a gross margin decrease from 13.3% to 2.0%[48]. - The group reported a net loss attributable to owners of the company of approximately RMB 9.6 million, compared to a profit of approximately RMB 33.7 million in the same period last year[53]. - The basic loss per share was approximately RMB 0.77, compared to a basic earnings per share of approximately RMB 3.17 in the same period last year[54]. - For the six months ended June 30, 2023, the total comprehensive income amounted to RMB 33,658,000, a decrease from RMB 301,584,000 for the same period in 2022[102]. - The company reported a net loss of RMB (9,617,000) for the six months ended June 30, 2023, compared to a profit of RMB 33,658,000 for the same period in 2022[102]. - The total segment profit from continuing operations for the six months ended June 30, 2023, was RMB (26,474,000), a decline from RMB 52,552,000 in the same period of 2022[136]. Sales and Production - For the six months ended June 30, 2023, the company's yarn product sales volume decreased by 16.9% to approximately 38,911 tons from about 46,800 tons for the same period in 2022[43]. - The company's yarn product production volume decreased by 22.5% to approximately 43,576 tons for the six months ended June 30, 2023, from about 56,201 tons for the same period in 2022[43]. - The average selling price of yarn products decreased by 15.9% to approximately RMB 11,710 per ton for the six months ended June 30, 2023, compared to RMB 13,928 per ton for the same period in 2022[47]. - The cost of goods sold for the six months ended June 30, 2023, was RMB 446,683,000, down from RMB 565,335,000 in the same period of 2022, reflecting a decrease of approximately 21%[149]. Assets and Liabilities - As of June 30, 2023, trade receivables increased to RMB 18,054 thousand from RMB 7,068 thousand as of December 31, 2022, representing a growth of 155.7%[6]. - Trade payables decreased to RMB 13,237 thousand as of June 30, 2023, down from RMB 14,312 thousand as of December 31, 2022, a decline of 7.5%[13]. - The total current liabilities as of June 30, 2023, amounted to RMB 208,016 thousand, slightly down from RMB 211,481 thousand as of December 31, 2022, a decrease of 1.1%[13]. - The company’s cash and bank balances decreased to RMB 172,677,000 from RMB 263,398,000, reflecting a reduction of approximately 34%[92]. - The total inventory as of June 30, 2023, increased to RMB 230,977,000 from RMB 132,891,000 as of December 31, 2022, reflecting a significant rise[169]. - The company has a current liability exceeding current assets by approximately RMB 232,501,000, raising significant doubts about its ability to continue as a going concern[107]. Market Conditions - The international cotton price fluctuated between USD 0.80 and USD 0.90 per pound, significantly lower than the USD 1.50 per pound in Q2 2022, primarily due to a weak global economy and high interest rates[40]. - The textile industry faces challenges including high inflation and rising interest rates, impacting global demand and consumption[65]. - The outlook for the second half of 2023 anticipates continued economic resilience in China, despite ongoing pressures in the export market[65]. - The textile market is expected to face challenges in the future, but the company believes it can leverage opportunities arising from industry improvements[66]. Operational Adjustments - The company has adjusted its product mix to focus more on polyester yarn and grey polyester color yarn products in response to market conditions[44]. - The company plans to closely monitor market changes and adjust inventory levels and production capacity accordingly[66]. - Emphasis will be placed on improving product mix and pricing strategies to strengthen competitive advantages[66]. - The company aims to enhance production efficiency through increased automation and economies of scale[66]. Shareholder Information - As of June 30, 2023, the company had 1,252,350,000 shares issued, with significant holdings by directors, including 41.07% by Mr. Zheng Hong[72]. - The company has not purchased, sold, or redeemed any of its listed shares during the six months ending June 30, 2023[70]. - A share option scheme was adopted to recognize and reward eligible participants contributing to the group's growth, with a maximum of 125,235,000 shares available for issuance[74]. - The share option plan is valid until June 25, 2031, and no options have been granted as of the report date[81]. Cash Flow and Financing - The net cash used in operating activities was RMB (128,646,000), compared to a net cash inflow of RMB 19,384,000 for the same period in 2022[104]. - The net cash used in financing activities was RMB (29,374,000) for the six months ended June 30, 2023, compared to a net cash inflow of RMB 42,130,000 for the same period in 2022[104]. - The company has secured short-term bank loans of approximately RMB 65,300,000, which are included in current liabilities as of June 30, 2023[109]. Government Grants - The group recognized government grants of RMB 5,710,000 in the first half of 2023, a substantial increase from RMB 269,000 in the same period of 2022[142].

香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）對本公告的內 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 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CHINA WEAVING MATERIALS HOLDINGS LIMITED 中 國 織 材 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：3778） 截至二零二三年六月三十日止六個月之中期業績公告 中國織材控股有限公司（「本公司」）董事（「董事」）會（「董事會」）宣佈本公司及其 附屬公司（「本集團」）截至二零二三年六月三十日止六個月的未經審核簡明綜合業 績，連同二零二二年同期之比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二三年六月三十日止六個月 二零二三年 二零二二年 （未經審核） （未經審核） 附註 人民幣千元 人民幣千元 （經重列） 持續經營業務 收入 4 455,663 651,838 銷售成本 (446,683) (565,335) 毛利 8,980 86,503 ...

Financial Performance - The group's gross profit from continuing operations decreased from approximately RMB 303.2 million for the year ended December 31, 2021, to approximately RMB 58.1 million for the year ended December 31, 2022, representing a decline in gross profit margin from about 18.5% to approximately 4.4%[9]. - The group reported revenue from continuing operations of approximately RMB 1.3181 billion for the year ended December 31, 2022, a decrease of 19.7% or approximately RMB 322.8 million compared to the previous year[69]. - Yarn product revenue fell by 19.7% from approximately RMB 1.6409 billion in the year ended December 31, 2021, to approximately RMB 1.3181 billion in the year ended December 31, 2022[35]. - The group experienced pressure on yarn product selling prices due to deteriorating market conditions, with selling price declines outpacing raw material cost reductions[9]. - The group reported other income from continuing operations for the year ended December 31, 2022, was approximately RMB 23.6 million, a decrease of 37.2% or about RMB 14.0 million compared to RMB 37.6 million for the year ended December 31, 2021[70]. - The group recorded other losses from continuing operations of approximately RMB 8.1 million for the year ended December 31, 2022, a decrease from approximately RMB 17.6 million for the year ended December 31, 2021[45]. - The company reported a loss attributable to owners of approximately RMB 12.6 million for the year ended December 31, 2022, compared to a profit of approximately RMB 202.5 million for the year ended December 31, 2021, indicating a significant decline in profitability[92]. - The net loss margin for the year ended December 31, 2022, was approximately 1.0%, down from a net profit margin of approximately 12.3% for the previous year, primarily due to a decrease in gross profit[92]. Market Conditions - The textile industry faced significant challenges in 2022 due to global economic downturns and fluctuating raw material prices, impacting profitability[21]. - The international crude oil prices fluctuated between $100 and $120 per barrel in the first half of 2022, affecting the prices of downstream products, including polyester yarn raw materials[30]. - The group faced significant challenges in the textile industry due to rising raw material costs and was unable to fully pass these costs onto customers, leading to pressure on sales prices[64]. - The economic growth momentum in China slowed in 2022 due to COVID-19 outbreaks and related government measures, negatively impacting the textile market[98]. - The implementation of the Xinjiang-related legislation is expected to have a severe negative effect on the company's textile exports to the United States[98]. Operational Changes - The company decided to cease operations of Xinyuan in July 2022 to preserve financial resources and focus on its core yarn production business due to cautious market outlook[27]. - The group plans to focus on core business operations after ceasing operations at the XinYuan division due to unfavorable market conditions[41]. - The company will continue to monitor market changes and adjust inventory levels and production capacity, aiming to improve product mix and pricing strategies[28]. - The new workshop's production line, with a capacity of 25,000 spindles, began commercial operations in Q4 2022, and the remaining capacity is expected to undergo trial production in Q1 2023[38]. - The new workshop with a capacity of 50,000 spindles was completed in Q4 2022, with 25,000 spindles already in commercial operation and the remaining 25,000 spindles undergoing trial production in Q1 2023[54]. - The group anticipates that the new workshop will enhance production efficiency and reduce labor costs through high automation levels[38]. - The group plans to enhance automation in production to reduce labor costs and strengthen competitive advantages, while focusing on core business and adjusting inventory levels and production capacity[77]. Customer and Supplier Dynamics - The group had over 1,900 customers as of December 31, 2022, with sales to the five largest customers accounting for 13.9% of total sales, and sales to the largest customer representing 5.1% of total sales for the same period[14]. - The company has approximately 60 suppliers, with the top five suppliers accounting for 47.1% of total procurement, indicating a high concentration risk[115]. Financial Position - As of December 31, 2022, the group's cash and bank balances were approximately RMB 263.4 million, a decrease from RMB 283.0 million as of December 31, 2021[73]. - As of December 31, 2022, the company's interest-bearing borrowings amounted to approximately RMB 515.2 million, a decrease from RMB 553.2 million as of December 31, 2021, with 83.8% of borrowings due within one year[93]. - The company's debt-to-asset ratio was approximately 38.5% as of December 31, 2022, compared to 35.5% as of December 31, 2021[93]. - The group's net current liabilities were approximately RMB 213,940,000 as of December 31, 2022, indicating significant uncertainty regarding the group's ability to continue as a going concern[179]. Governance and Compliance - The board consists of one executive director, one non-executive director, and three independent non-executive directors, ensuring compliance with independence requirements[134]. - The company has established a remuneration committee to review and determine the remuneration packages for directors and senior management, with independent non-executive director serving as the chairman[139]. - The board has implemented a risk management and internal control system to enhance operational efficiency and ensure compliance with relevant laws and regulations[150]. - The company has complied with the ethical responsibilities outlined in the professional code of conduct[197]. Strategic Initiatives - The company invested in Jiangxi Xinyuan Special Fiber Co., Ltd. to capitalize on the trend of using eco-friendly yarn products and to achieve vertical integration in the industry[67]. - The company is closely monitoring the impact of the COVID-19 pandemic on its operations and will adjust its product mix and sales strategies accordingly to ensure sufficient cash flow[149]. - The group is committed to energy conservation and environmental protection, having obtained ISO14001 certification for its subsidiaries and installed solar panels for production facilities[81].

香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）對本公告的內 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 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CHINA WEAVING MATERIALS HOLDINGS LIMITED 中 國 織 材 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：3778） 截至二零二二年十二月三十一日止年度之業績公告 中國織材控股有限公司（「本公司」）董事（「董事」）會（「董事會」）宣佈本公司及其 附屬公司（「本集團」）截至二零二二年十二月三十一日止財政年度的經審核綜合業 績，連同上一個財政年度的比較數字如下： 綜合損益及其他全面收益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 人民幣千元 人民幣千元 （經重列） 持續經營業務 收入 4 1,318,133 1,640,903 銷售成本 (1,260,031) (1,337,727) 毛利 58,102 303,176 其他收入 5 23,613 37,578 其他收益及虧損 6 (8,091) (17,59 ...