Huamao Shares Purchase Xinjiang Cotton Enterprises

In 2010, the surging cotton price trend is stirring up the whole industry chain development mode. Huamao stock One of them is the company's announcement that it intends to buy. Xinjiang cotton enterprises 。

In December 14th, Huamao stock and natural person Zhang Qihai jointly signed the "equity transfer agreement". Huamao shares intends to buy the latter, holding 35% stake in Korla Xinjiang Lihua cotton industry limited liability company, and the purchase price is 58 million 609 thousand and 400 yuan. The announcement shows that the main products of Lihua cotton are lint, cottonseed, short pile, cottonseed oil and so on. The company is directly under 5 branches and 1 branches, 1 wholly owned subsidiaries. It has 9 domestic advanced cotton processing and production lines, and has more than 650 employees. The company has the annual production capacity of 200 thousand tons of lint, 75 thousand tons of cottonseed meal and 22 thousand tons of cottonseed oil.

It is understood that as a typical textile enterprise in the eastern coastal area, cotton is the main raw material of Huamao stock. Its cost accounts for more than half of the company's production cost. Xinjiang, as a major province of the country's output, accounts for about 40% of the country's output and has a high level of quality, consistency and spinnability. It is the main raw material purchasing base for Huamao stock, which has accounted for more than 70% of the total cotton used in the company. However, at the current high cotton price in 2010, Huamao stock business is being tested, so the company pointed out in its semi annual report that the shortage of cotton is the main predicament and problem faced by the company.

However, Xinjiang's Lihua cotton industry is the beneficiaries of high cotton prices in 2010. The announcement shows that in 2009, the net assets of Lihua cotton were 59 million 6 thousand and 100 yuan, the main business income was 101 million yuan, the operating profit was 9 million 380 thousand and 700 yuan, and the net profit was 23 million 88 thousand and 400 yuan. In the first 8 months of 2010, the company's net assets increased to 133 million yuan. In the first 8 months of 2010, its main business income was 599 million yuan, and its net profit was 84 million 168 thousand and 100 yuan.

Huamao shares said that from the development status of China's textile industry, the supply of raw cotton market is less than demand, and the supply and demand is seriously unbalanced, and this situation is not expected to be solved in a long time in the future. The 35% share of the assignee cotton company is aimed at establishing a stable strategic partnership on resources, stabilizing the supply and demand of high-quality cotton, and purchasing sufficient and reliable raw cotton for the implementation of the company's main development strategy, and further improving the industrial chain of the main textile industry of the company.