Monday, November 30, 2020
Martin Hennecke
HKEx Stock Code : 01616 
Corporate Profile
The Group is principally engaged in the design, manufacturing and sale of high-end Fabric Products. The Group's principal products can be broadly divided, by their weaving constructions, into two categories, namely, jacquard fabrics and dobby fabrics.

Business Review - For the year ended December 31, 2012

In 2012, due to the unfavorable factors including the domestic and international economic environment, the price variation between domestic and overseas cotton and the rising costs of labour and energy, the Group recorded a falling result. Facing this severe market situation, the Group firmly implemented its core strategy, took its advantages of the matured and stable innovation system and market resources, continued to consolidate the development of its principle business and maintained 100% of its rate of operation. Furthermore, the Group emphasizes more on the lean management, implemented energy saving measures, optimized the resource mix and strengthened our internal management and costs control in order to alleviate the impact of the aforementioned adverse factors. During the Period under Review, although there was a drop in the revenue and profit, various indicators such as gross profit margin and net profit rate were still higher than the industry average level, and the Company has maintained its leading position in the designated market.

For the year ended 31 December 2012, the Group''s revenue was approximately RMB871.4 million, a decrease of approximately 6.1% as compared with approximately RMB927.8 million in the previous year. The decrease was mainly due to the decline in the product price. Profit attributable to equity shareholders of the Company was approximately RMB74.0 million in 2012, a decrease of approximately 54.3% as compared with approximately RMB162.1 million in the year 2011. The decrease in profit was mainly due to the decline of the average selling price of the textile products of the Group resulted from the declining international and domestic economies, the continued rising production costs and the increase of the non-recurring listing expenses.

For the year ended 31 December 2012, the sales volume of jacquard fabrics and dobby fabrics, the Group''s major products, were approximately 9.5 million meters and 44.6 million meters respectively, representing a slight decrease of 2% and an increase of 17% respectively as compared to those of the previous year. The percentage of revenue derived from jacquard and dobby fabrics made from new materials amounted to approximately 61% in 2012, representing an increase of approximately 17% as compared to that of the previous year. This showed the market penetration and development of new fabrics of the Group.

During the Period under Review, the Group continued to enhance the application and development of new materials according to the market demand. In October 2012, the new products of the Group, namely "High strength bamboo fiber jacquard fabric"(「大提花高強竹纖維面料」), "Cupro and rayon inter-woven imitate silk fabric" (「銅氨絲、黏膠交織紡真絲面料」) and "Newdal inter-woven jacquard fabric" (「大提花紐代爾交織面料」) have passed the appraisal of specialists of textile industry in China. The production technology required for these products was confirmed as attaining international leading standard or domestic leading standard. In addition, the Group sponsored the Second National "Yinshilai" Cup Jacquard Fabric Innovation Design Contest. The contest was a domestic professional top event organized by China Cotton Textile Association which was designed to collect jacquard creative design artworks from all over the world. In this contest, 670 pieces of design were received. There were 4 pieces of works of the Group awarded with silver award and bronze awards respectively. The substantial increase of entries and awarded works of the Group reflected that the activity has attracted more attention from creative agencies and the Group has achieved great progress in product design. The success of the two contests played a positive role in expanding the innovation resources, widening the vision of the research and development (the "R&D") personnel of the Group, improving the Group''s reputation in the industry and developing space for future market development of the Group.

Based on the Group''s innovation capability and market situation, the Group was ranked 5th among China''s Top 20 Competitive Textile Enterprises (中國棉紡織行業競爭20強企業) for the year 2011 and 2012, and was awarded the Most Influential Brand Recommended by China''s Cotton Textile Industry (中國棉紡織行業推薦最具影響力產品品牌) (valid from October 2012 to September 2015) in October 2012. The Group''s R&D center was recognized by Shandong Economic and Information Technology Committee as Shandong Provincial Enterprise Technology Center (山東省企業技術中心) in November 2012.

Business Outlook - For the year ended December 31, 2012

Looking ahead, the economic situation faced by the textile industry will face a great deal of uncertainties, nevertheless, in the long run, as an emerging industry in China, the demand for high-end home textile products in global especially in China, will maintain the trend of high growth. According to the data of the fourth quarter in 2012 and the beginning of this year, the export for textile products has been restored and domestic demand has realized a basically steady increase. With the stabilization and recovery of both the international and domestic economy, the textile market is expected to gradually return to the normal growth trend.

As a supplier dedicated to offering high-end, functional, differential and high value added fabric products to the customers, the Group has established its leading position in the high-end home textile fabric market in the PRC, particularly in the market of jacquard and dobby fabrics. In future, the Group will continue to focus on its core strategy and improve its development and innovation capabilities. Additionally, the Group will further explore the potential and strengthen the management; continue to implement energy saving, increase income and reduce expenses in order to improve the Group''s profitability. Furthermore, while promoting the construction of new project and expanding the production capacity, the Group, leveraging on its established brand image, will also actively seek for the possibility of resource integration and brand expansion by alliance and cooperation with anticipation of solidifying and improving its leading position and brand image in the designated market through more flexible and wider channels.

We firmly believe that, by further improving our innovation, continuing to consolidate our market position and enhance our good image of "Yinshilai" brand, the Group will be able to take full advantages of the fast growth of China''s economy and home textile industry and rapidly grow into a leading enterprise in China high-end home textile fabric industry.

The Group expects to finance the above plans from its internal resources, the bank borrowing and partial of its Net IPO Proceed.

Source: Silverman Hold (01616) Annual Results Announcement
Chairman LIU Dong Issued Capital (shares) 800M
Par Value USD 0.01 Market Capitalisation (HKD) 800M
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