Production volume increased as well. During the Period, the production volumes of cotton yarn, grey fabric and denim were 407,000 tons, 752 million metres and 81 million metres respectively.
Sales to the Hong Kong market continued to increase. Revenues generated from domestic market reached RMB 6.136 billion, accounting for 66.2 percent of the total turnover.
For the six months ended June 30, 2006, gross profit margin decreased to 15.5 percent, mainly due to keen competition in the cotton yarn market. The Group increased its sales of grey fabric in high-end markets to further diversify its sales channels, and sales of high end cotton yarn decreased.
This resulted in a significant decrease in gross profit of cotton yarn and an increase in gross profit of grey fabric. Gross profit margin of denim decreased due to lower sale season in denim sales.
During the first half of 2006, the Group's selling and distribution costs decreased by 12.4 percent to RMB 162 million from RMB185 million for the first half of 2005 as transportation costs decreased by 18.8 percent from RMB 133 million in the first half of 2005 to RMB 108 million.
Weiqiao Textile Company Limited, a non state-owned enterprise, is the largest cotton textile producer in the PRC, specializing in the production, sales and distribution of cotton yarn, grey fabric and denim.
During the past ten years, the Group developed large-scale production capabilities by capitalizing on China's rapid economic growth. It has achieved strong positioning in the global textile markets by employing advance technology in state-of-the-art facilities.
Weiqiao Textile Company Limited
marketing@alchempro.com
