Written by The Edge
Zipper manufacturer Fuxing China Group says net profit surged 205% to RMB14.9 million ($2.9 million) on a near 70% increase in revenue to RMB204.3 million for the three months ended 30 June 2010 (2Q2010).
The strong 2Q2010 performance boosted the group’s 1H2010 net profit by 148% to RMB25.8 million and its revenue by 55% to RMB312.4 million.
As the group is also gearing up its production for a new product – Super Durable Zipper – which could generate a higher profit margin, Fuxing China says the uptrend is expected to continue for the rest of the current financial year.
During 2Q, sale of the group’s Zipper segment products comprising finished zippers, zipper chains and zipper sliders amounted to RMB127.1 million compared to RMB70.7 million in the prior period. This represented an increase of 80%, as both local and export sales grew healthily as a result of the recovering economies in China and overseas markets.
Trading operations contributed to the group’s revenue of RMB77.0 million compared to RMB 45.8 million in the prior period.
Revenue from its Knitting Wool segment fell to RMB0.3 million or 94% following the discontinuation of this operation during the current quarter.
The group’s gross profit increased by 99% to RMB36.6 million in 2Q2010 due to its better pricing which has also generated a higher gross margin.
Overall, gross margin increased by 2.7 pts to 17.9% due largely to the continued increase in gross profit margin of the zipper business which reached 27.8% in 2Q2010.
Dividend : None
