Huafang Textile Lost 33 Million 760 Thousand Yuan In The Medium Term Or Was Included In ST

In August 16th,

The semi annual report 2012 was released.

The report shows that in the first half of 2012, Huafang lost 33 million 763 thousand yuan.

The company lost 294 million 866 thousand and 700 yuan in 2011, which shows that the loss of Huafang textile has lasted for a year and a half.

According to the relevant regulations, if Huafang textile products can not turn round this year's performance before December 31, 2012, the company will be placed in the list of ST shares.

Continuous loss of performance

Or be included in ST shares.

According to Huafang textile annual report 2011, the total revenue in the first half of 2012 was 733 million yuan, an increase of 2.28% over the same period last year. However, due to the total business cost of up to 788 million yuan, Huafang achieved a net profit of only -3376 million in the first half of 2012.

For the reasons for the loss, Huafang textile reported in the board's report that the price of the main raw material cotton in the main textile industry of the company was seriously upside down in the domestic and international markets, and the international cotton price was much lower than that in the textile industry.

On the other hand, the cost of labor involved in the textile industry continues to rise, especially the increase in labor wage costs. Electricity costs and other expenses have not fallen due to the overall downturn in the market, including high interest costs, which has further increased the operating costs and burdens of enterprises. In addition, the strain of labor resources has also constrained the release of capacity. Because Huafang textile is located in the economically developed areas of the East, labor shortage has become a bottleneck for the production of enterprises.

Huafang textile said that the above aspects led to a lower production opening rate, which affected the production capacity.

According to the previous data of Huafang textile, the company was also at a loss in 2011.

According to the company's 2011 Annual Report, in 2011, Huafang textile realized its operating profit of -4048.47 million yuan, and its net profit attributable to shareholders of listed companies was -2881.44 million yuan, achieving a basic earnings per share of -0.09 yuan.

According to the relevant provisions of the Shanghai Stock Exchange Listing Rules (2012 Revision), when the company has made a continuous loss in recent two years (based on the audited net profit reported in the latest two years' annual report), the Shanghai stock exchange will give warning of delisting risks to its stock trading.

That is to say, if China's textile products fail to achieve profitability in the second half of 2012, Huafang textile will inevitably be included in the ST shares.

Poor operating environment

Does the company lack confidence?

Faced with the loss of performance and the risk of being classified as ST shares, how to deal with Huafang textile?

In the report of the board of directors, Huafang textile said: "as a textile industry, the company has increased the number of factors that restrict steady growth.

The sharp reduction of cotton and other textile raw material prices has reduced the profit margins of enterprises. The current cost pressures of textile industry are prominent, and the prices of textile raw materials such as cotton have not yet been reasonably returned. Domestic and international cotton prices are difficult to integrate, labor and energy prices will not drop, credit policies will not be relaxed, and the terminal price pmission of products will be relatively backward and unsmooth.

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

For the second half of the business goal, Huafang textile board of directors seems to have some inadequacy, only saying "strive to achieve the goal of turning losses into profits."

As for the measures to be taken, Huafang textile company starts with increasing output and reducing consumption, focusing on internal tap potentials, reducing production costs, reducing personnel costs, reducing labor costs, strengthening two fund management, expanding market, clearing out market, avoiding market risks, accelerating capital turnover, reducing interest cost and improving efficiency of capital utilization, focusing on adjusting operation structure and product structure, improving product quality and technical content, raising gross margin level, developing high end large clients and foreign direct customers, and ensuring the normal operation of main industries through the operation of the company, and striving to make up deficits and increase profits.

"These measures are all empty talk," they said in the report. "Shortage of labor has become a bottleneck for the production of enterprises." now, in response to the measures, it is not contradictory to propose "reducing personnel and reducing labor costs."

In addition, in the sewage treatment, battery manufacturing and warehousing industry, Huafang textile also involves, especially in battery manufacturing, Huafang textile has high expectations and strong confidence.

But some investors said: "Huafang textile is a family.

The proportion of textile industry in the operation of its textile industry is more than 90%, and the other industries involved are even better if the performance is better.