The textile and apparel industry is experiencing a strong economic recovery this year, driven by increased exports and growing domestic demand. This has led to improved performance across the sector, with many companies reporting significant growth in profits. According to recent data, 69 listed companies in the clothing and textile industry have seen a positive trend, with 60% of key players recording net profit growth exceeding 30%. Analysts suggest that this rapid recovery is partly due to a "low base" effect from the previous year, when the industry was heavily impacted by the financial crisis. Lutai Textile Co., Ltd., a major player in the industry, reported impressive results in the first half of 2010. Its A-share division saw revenue rise to 2.247 billion yuan, an increase of 21.95%, while operating profit reached 444 million yuan, up 50.65%. Net profit for the period stood at 367 million yuan, reflecting a 39.2% year-on-year growth. Analysts like Guo Haiyan from CICC attributed this success to higher product prices amid rising cotton costs, as well as effective cost management through strong cotton reserves. The company also benefited from the launch of its 10 million meters jacquard women’s fabric project, which boosted shirt fabric revenue by 24% and improved gross margin by 7.5 percentage points to 34.8%. In contrast, Youngor reported a decline in overall revenue for the first half of 2010, with total revenue falling 7% year-on-year to 5.352 billion yuan. However, the textile and apparel segment showed more resilience, with revenue increasing by 7% and net profit rising by 21%. Despite this, analysts noted that export revenue dropped by over 5%, and gross margins declined, indicating challenges in the global market. CICC highlighted that Youngor’s domestic performance was strong, thanks to efforts in brand building, product innovation, and supply chain optimization. The company has also expanded its store network, with over 80% of its outlets being self-operated, allowing better control over retail operations. Meanwhile, Seppuri reported a 10.7% year-on-year increase in operating income to 970 million yuan, with operating profit up 40.7% and total profit rising 36.2%. The company also expanded its retail footprint, adding 79 direct-operated stores during the period. Despite these positive trends, industry experts caution that the sector still faces challenges, including rising operational costs and competitive pressures. Seven Wolves, for instance, has slowed its expansion strategy to focus on improving profitability per store. Metersbonwe, a leader in casual wear, saw a sharp drop in interim results, with net profit falling 83% year-on-year. However, the second quarter showed improvement, with operating income rising 39% and sales from direct-operated stores growing by 53%. The company also reported strong growth for its Smithland brand, which saw a 35% increase in sales. Finally, The Pathfinder, one of the early GEM-listed companies, posted a 34% year-on-year increase in revenue to 154 million yuan. Outdoor apparel remained its main driver, contributing 62% of total revenue. The company also expanded its store network, opening 71 new outlets, including 27 direct-operated and 44 franchised stores.

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Shaoxing Shangju Textile Co., Ltd. , https://www.shangjutex.com