Wei Bridge's Net Profit Fell 32% To 206 Million Yuan In The First Half Of The Year.

Recently, 02698.HK announced its interim results. In the 6 months ended June 30, 2019, the company realized an income of 7 billion 784 million yuan (the same below), a decrease of about 7.4% from the same period last year, a gross profit of 608 million yuan, a decrease of 30.73% over the same period last year, and a net profit of 206 million yuan for the company owners, a decrease of about 32% over the same period last year, a basic earnings per share of 0.17 yuan, and no interim dividend.

The announcement indicated that during the reporting period, the group income decreased by about 7.4% compared with the same period last year, of which textile income was about 5 billion 19 million yuan, down by about 10.4% compared with the same period last year, mainly due to the unfavorable factors such as trade friction. The global economic growth was weak and the market demand weakened, resulting in a corresponding decline in the income of the three categories of textile products. Electricity and steam revenues were about 2 billion 765 million yuan, down by about 1.5% compared to the same period last year, mainly due to the steady electricity sales and the impact of coal price declines. The net profit of company owners should be reduced by about 32% compared with the same period last year, mainly due to the low demand for textile market and the decline in the price of group textiles, resulting in a larger decline in gross margin of textiles.

In terms of textile business, the group continued to strengthen internal management, optimize product structure and enhance the level of intelligence. In July 2019, Wei Qiao textile was successfully selected as the "Shandong quality benchmark" list in 2019 based on its management experience of intelligent process control and high-end textile brand management. To further improve production efficiency, the Group invested in the construction of an automatic and intelligent production line. The production line is expected to be put into operation in October 2019, so as to achieve the integration of spinning and weaving and intelligent control of the whole process. The group has continued to attach importance to the research and development of new products, and has developed a series of green environmental protection products through cooperation with the national textile product development center, Qiingdao University and independent research and development, including seaweed fiber textiles, segmented yarn, yarn and hollow functional yarn, and so on.

In terms of power and steam business, the Group continues to improve management efficiency and reduce related losses through meticulous and modular management. In the first half of this year, the price of coal also had a downward trend, which reduced the cost of the power business to a certain extent.

Looking forward to the second half of this year, the group is still facing the impact of multiple factors such as poor global economic growth, intensified trade frictions, weak terminal consumption and rising labor costs, but it is expected that overall textile business and power and steam business will remain stable.