China Taisan registers sterling 70.5% growth in 9M08 net profit to RMB182 million
9M08 revenue rose 66.8% to RMB850.2 million
9M08 gross profit margin improved 2.7ppt to 32.1% due to higher average selling price, and improved product mix
Order book of RMB300.0 million as of 31 October 2008
Singapore, 4 November 2008 – SGX Mainboard-listed China Taisan Technology Group Holdings Limited (“China Taisan” or the “Group”), a leading producer of knitted performance fabrics used in sports and leisure apparel for renowned brands such as Nike, Adidas, Umbro, Septwolves (七匹狼), Li-Ning (李宁), Anta (安踏), and Metersbonwe (美特斯邦威) is pleased to announce a 70.5% improvement in net earnings for the 9 months ended 30 September 2008 to RM181.8 million.
With continued growth in demand for performance fabrics that command higher selling prices, the Group saw revenue improve 66.8% to RMB850.2 million in 9M08. The stronger revenue was also a result of higher average selling prices (“ASP”) across all product sectors, with weighted average ASP increasing 38.2%.
Gross profit improved 81.8% to RMB272.5 million while the overall gross profit margin jumped 2.7 percentage points to 32.1% on the back of: (i) continued shift in product mix to focus on higher-margin performance fabrics; (ii) ability to increase ASP to more than offset rising costs
The Group’s cash flow remains healthy, with net cash generated from operating activities of RMB198.8 million as compared to RMB58.0 million in 9M07. EPS grew 50.1% from RMB15.14cents to 22.73 RMB cents.
“Post Olympics, we are seeing more sports awareness in the country and consumers are now more brand conscious. Sports brands are eager to differentiate themselves with extensive advertising and product differentiation. Tapping on that, we are continuously maintaining our competitive edge through R&D to introduce more functionalities with enhanced effects. We believe our customers, who are mainly larger players in the industry, will gain market share with such strategies. In turn, we are set to grow along with our customers.”- Mr Lin Wen Chang (林文章) Chief Executive Officer
Future Outlook
The Group is moving ahead with expansion plans, and as at 4th November 2008, 20 multi-track electronic tubular knitting machines have been delivered and installed. The remaining knitting machines and fabric face finishing and processing equipments are on track to be installed by the end of this year. The new equipments will expand China Taisn’s knitting capacity and product range for performance fabrics that incorporate higher value-adds, such as spandex.
“Despite the global financial crisis and post Olympic effects, many of our end sportswear customers have indicated strong demand for 2009 summer season. The 4th quarter is typically our busiest time of the year as customers start to stock up for the summer season. Furthermore, with the new status of approved supplier for renowned brand ssuch as Metersbonwe, we are expecting order volumes for performance fabrics to go up.- Mr Lin Wen Chang (林文章)Chief Executive Officer
As the Group transits to the seasonally peak period in the 4th quarter, the order book as at 31October 2008 stood at RMB300.0 million. These confirmed orders are expected to be fulfilled within the next three months. Barring any unforeseen circumstances, the Board of Directors remains positive about the Group’s performance in the current financial year. Based on IPO plans, the Group intends to distribute at least 30% of net profit for FY2008 and FY2009 as dividends.
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