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| Strives to Offer a Wider Range of Innovative and Sustainable Denim Fabrics to Further Expand Customer Base |
HONG KONG, Mar 28, 2019 - (ACN Newswire) - Hingtex Holdings Limited ("Hingtex" or the "Group"; Stock Code: 1968), a leading denim fabric manufacturer of long-standing in Hong Kong targeting the mid-range to high-end market segment, today announced its results for the year ended 31 December 2018 ("the review year").
During the review year, the Group continued to strategically specialise in the manufacturing of stretchable denim fabrics and has managed to deliver a stable performance with revenue of HK$640.7 million (2017: HK$648.2 million) and gross profit of HK$200.6 million (2017: HK$212.8 million), despite the pace of global economic growth has slowed down. After taking into account the one-off listing expenses and the non-recurring imputed interest income on amounts due from related companies, the Group achieved an adjusted net profit of HK$90.1 million (2017: HK$109.5 million(2)).
The Board of Directors has proposed the payment of a final dividend of HK2 cents per ordinary share for the year ended 31 December 2018. The Group maintains a healthy financial position with bank balances and cash of HK$185.1 million.
Business Review
Hingtex continues to specialise in a range of stretchable denim fabrics with various properties, especially stretchable blended denim fabrics, which accounted for approximately 85.2% (2017: 80.1%) of the Group's total revenue. This aligns with the rising growth trend and demand for denim garments with stretchable fabric properties, in particular the rising popularity of stretchable denim clothing with various functionalities for men.
During the review year, Hingtex managed to, in light of enhanced product features and increased manufacturing costs, increase the average selling price of stretchable blended denim fabrics by 7.2% to HK$25.3 per yard (2017: HK$23.6 per yard), resulting in an increase of HK$26.8 million in revenue, thus raising total sales of those fabrics to HK$546.1 million (2017: HK$519.3 million). Other denim fabrics including the stretchable cotton denim fabrics and non-stretchable fabrics together contributed HK$87.8 million or 13.7% of the Group's total revenue.
In late 2018, Hingtex received new orders from a returning Brand Owner, which is a renowned worldwide clothing and accessories retailer based in the US. The Group reckons that there continues to be plenty of room for growth in the US market to tap in the future.
Prospects
Looking ahead, 2019 has had a good start with the Sino-U.S. trade tension easing in the first quarter of the year. Since the beginning of the review year to this date, the Group has dispatched over 2 million yards of denim fabric to its customers which were originally schedule for delivery in 2018. Moving forward, to counter the additional costs resulted from fluctuations of manufacturing costs, the Group will continue to strive for more competitive price and balance the burden with its customers to maintain its profit margin. The Group remains cautiously optimistic towards the business outlook and will closely monitor market changes and manage risks so that it can take pre-emptive measures against anticipated challenges.
To seize opportunities and achieve long-term growth, Hingtex will strive to strengthen its leading position in the denim fabric manufacturing industry. It will push to develop and offer a wider range of innovative and sustainable denim fabrics such as those that incorporate more natural fibres into the products. The Group will also increase the production capacity of its factories in Zhongshan, the PRC. Production facilities enhancement plans are in progress and on schedule, with the first batch of equipment ready to operate by the end of 2019 and the refurbishment process to be completed by early 2021.
Apart from securing orders from existing customers and bolstering ties with US brand owners, Hingtex plans to further penetrate the European and PRC markets by hiring industry consultants to gain a better understanding of these markets and has already established cooperative arrangements with COTTON USA(TM) and Mr. CHEN Wen, a prominent denim designer in the PRC to organise a denim fashion show in Beijing, China. In the future, the Group will continue to innovate and dedicate more resources to bolster R&D capabilities in developing denim fabric so as to remain competitive in the industry.
Notes:
(1)Adjusted dividend payout ratio excludes the net profit from its 2018 interim results before its listing in July 2018.
(2)Adjusted net profit in 2017 excludes the listing expenses, gain on disposals of property, plant and equipment and imputed interest income on amounts due from related companies.
About Hingtex Holdings Limited
Founded in 1981 and listed on the Main Board of HKEX in 2018, Hingtex is an established denim fabric manufacturer that specialises in the design, manufacturing and sales of denim fabrics, targeting the mid-range to high-end market segment and focusing on the US market. With longstanding relationship with over 30 apparel brands and over 120 customers, the Group primarily supplies denim fabrics for the production of denim garments of certain reputable US apparel brands. The Group has rich experience in manufacturing a variety of denim fabrics and specialises in manufacturing stretchable blended denim fabrics, and offers its products in the form of garment end-products such as denim jeans, jackets and skirts. Hingtex has been using innovative and sustainable materials for its denim fabrics and its product design and development capability have been widely recognised by its customers. For more details about Hingtex, please visit the Group's website: www.hwtextiles.com.hk
Media Enquiries:
Strategic Financial Relations Limited
Vicky Lee Tel: (852) 2864 4834 Email: vicky.lee@sprg.com.hk
Jessica Siu Tel: (852) 2114 2820 Email: jessica.siu@sprg.com.hk
Suzanne Leung Tel: (852) 2864 4873 Email: suzanne.leung@sprg.com.hk
Website: www.sprg.com.hk
Topic: Press release summary
Source: Hingtex Holdings Limited
Sectors: Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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