Tianhong Textile (02678.HK) In The First Half Of The Net Profit Reduction Of About 20 To 25%

02678.HK announced that the unaudited shareholder's profit attributable to the group for the 6 months ended June 30, 2019 may be about 20 - 25% decline compared with the same period last year.

The announcement said that in response to market conditions, the group strategically adjusted product mix and pricing to maintain capacity utilization. However, the profitability of the group in the second quarter was affected (the second quarter was the group's peak season in the first half of the year, and its performance was usually better than in the first quarter). As a result, the gross profit margin during the period dropped to about 13.5%, compared with about 16.8% in the same period in 2018. Even if a one-time income was recorded due to the acquisition of Qing Ye group and its accounting treatment of the joint venture, the Group expects that the unaudited shareholders' profits will be reduced by about 20 to 25% during that period.