Weiqiao Textile, which is China's largest cotton spinner and the largest publicly-traded textile company, released its results for the first half of 2008 (six-month period ending June 30, 2008). The company's net profit plunged 55.4% to 767 million RMB; however, its total cotton consumption was only marginally lower as indicated by yarn and fabric output. January through June cotton yarn production dropped 3.4% to 422,000 tons. Grey fabric output fell 3.8% to 751 million meters, while denim fabric production remained unchanged from a year ago at 88 million meters. 50.4% of all sales during the first half of the year went to Mainland China buyers; this represented a decline from 60.6% during the same period in 2007. Weiqiao shifted to increased exports, with 11.9% going to East Asia, 21.4% to Hong Kong and 16.3% to other destinations. Profit margins declined across all product groups, with the strongest margins occurring in denim fabric, which maintained an average gross profit margin of 12.2%.
Weiqiao Textile Gross Profit Margins
Product
First Half 2008
First Half 2007
Cotton Yarn
6.7%
16.8%
Grey Fabric
7.8%
16.0%
Denim Fabric
12.2%
15.7%
Others
1.3%
8.9%
