Rainbow Textile's net profit reached three times last year

Recently, Rainbow Textile reported that the company's turnover in the first half of the year rose 8.5% from the same period last year to 3.609 billion yuan, and net profit reached 3 times the same period last year to 447 million yuan.

Inspired by the freedom to import international cotton and low labor costs, Rainbow Textile decided in 2006 to build a textile mill in Vietnam and continue to increase investment. In the past two years, as China's cotton price is much higher than that of the international market, Rainbow Textile enjoys a huge cost advantage and its performance is better than its domestic counterparts.

At present, the first phase of Tianhong Textile's northern Vietnam project (about 170,000 spindles and 30 rotor spinning machines) has been fully put into production in July this year. The group's other new production capacity in Vietnam and China totals about 600,000. Spindles are also expected to be fully operational in the third quarter of this year. Rainbow Textile stated that if there is no major change in the product mix, the annual yarn production capacity will reach approximately 440,000 tons.

Since the price difference between domestic and foreign cotton prices has narrowed in the first half of this year, and Tianhong Textile has certain cotton orders and stocks, the overall gross profit margin has also increased from 13.4% in the same period last year to 21.4%. According to the data, due to the increase in bookings for overseas cotton, in the first half of this year, the Rainbow Textile cotton inventory was 100,000 tons, worth 1.25 billion yuan.