Huafang Textile Lost Its Mire In The First Half Of 2012

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In the first half of 2012, it was still bogged down in losses.

Huafang 2012 China Daily reported that the company achieved a total revenue of 733 million yuan, an increase of 2.28% over the same period last year, but its total operating cost was as high as 788 million yuan, which seriously engulfed net profit, and the net profit attributable to shareholders of listed companies was -3376 million yuan.

It is worth noting that the net profit of the company after deducting non recurring gains and losses is -5443.11 million yuan. Although the government has not been out of the deficit situation, the government subsidy of 20 million 437 thousand and 800 yuan has contributed to its performance contribution.

The company said that the main reason for the loss is that cotton prices are seriously upside down in the domestic and international markets. International cotton prices are much lower than domestic cotton prices, resulting in high production costs and seriously affecting the efficiency and market sales of enterprises.

The cost of various labor costs continues to rise, especially the increase in labor wage costs. At the same time, the strain of labor resources also restricts the full capacity of production. Due to the shortage of labor force in the economically developed areas of eastern China, the shortage of labor force has become a bottleneck for the production of enterprises.

The company is not optimistic about the industry trend in the second half of the year.

The company said: as textile enterprises, the factors that restrict steady growth have increased.

The sharp reduction of cotton and other textile raw material prices has reduced the profit margins of enterprises.

When prices of textile raw materials have not yet been reasonably returned, domestic and international cotton prices are hard to integrate, labor and energy prices will not drop, credit policies will not be relaxed, and terminal price pmission of products will lag behind.

Above all, the growth rate of the industry will continue to decline in the first half of the year.

Bright prospects for lithium batteries

In contrast to the sluggish cotton spinning industry, the company's lithium battery industry has developed quite smoothly.

In the first half of 2012, the company produced a total of 2 million Ah of electricity, and completed the sales revenue of about 12 million yuan, an increase of 200% over the same period last year, of which 4 million 700 thousand of the sales of power batteries and 7 million 300 thousand of the reserve power of Communications and energy storage were realized.

Huafang textile said that the company increased sales promotion efforts in the first half of the year to further expand the market.

At present, it focuses on the development of communications and energy storage market, mainly the three major domestic enterprises, including China Mobile, China Telecom and China Unicom.

The company's products have been successfully awarded to China Mobile Communications Group Tianjin Co., Ltd., gaining 70% market share.

At the same time, it has also actively participated in the China Telecom's 2012 centralized procurement of lithium iron phosphate batteries, bidding for China Mobile lithium batteries limited by China Mobile Jiangsu Co., and tendering of China Mobile limited, and fully accumulated experience in all fields, laying a solid foundation for the company to enter the communications market in an all-round way.

Strengthening corporate internal governance

Recently, Huafang textile has been challenged by insider trading, exposing defects in the company's internal management from one side, and disclosing internal governance details in the company's interim report.

For example, due to the lack of responsibility of individual purchasers, there were a small number of procurement contracts in Huafang textile industry. No legal department signed the contract. Through education, all procurement contracts are reviewed by the legal department, thus avoiding the risks in the procurement process.

Original

The purchase price of the machine parts commonly used by the company has always been based on the unified price of the bidding price of the group company, making the joint stock company lack of independence in the business. Through the rectification, the stock company has established an independent bidding price comparison system, and no longer directly adopts the procedures of the group company.

The internal management also revealed that the company had been rather confused in the management of bidding procurement. The main problems were the failure to set up the tender working group, the lack of paper supplier's bid price information, the establishment of the pricing files for each purchase period, and the lack of qualification for a small number of main suppliers.

Huafang textile said that the above problems have been resolved through rectification.