China Ting Group Holdings Limited (HKG:3398)
Hong Kong, April 22, 2009 AEST (ABN Newswire) - China Ting Group Holdings Limited (HKG:3398)(PINK:CGUHF)specializes in textile and fashion apparel manufacturing. The company has a vertically integrated business model, from design, weaving, printing and dyeing to final garment assembly. The company has also got a well established nationwide distribution network with over 500 stores across China with products targeting the medium high end "Fashionista" lady fashion market. They also provide a "one stop shop" contract manufacturing solution for many renowned international brand names including Macys', Guess, Ralph Lauren, Gap, Esprit and more. In FY2008, despite the global economic crisis, the company has recorded a modest Equity Per Share growth of 6.6%. The company has also got a sound financial portfolio with a solid current ratio of 4.0x. As the China economy grows, the "Fashionista" market is expected to expand exponentially in the next few years. The company is well into a position to benefit from this growing market.
Retrospect View of 2008 and Company Strategy and Forecast for 2009
Since 2003, revenue of the Group has a compound annual growth rate of approximately 24.5%. In 2008, the Group experienced a mild negative growth for the first time. Like all other businesses engaged in garment manufacturing business, the Group was under pressure during the fourth quarter of 2008 with unexpected business slowdown in overseas markets, particularly in the US which is currently the principal market of the Group.
The economic contraction affects customers and businesses alike, but the Group continues to strengthen its liens with its working partners by offering them full and strong support, more designs and greater creativity through our ODM services, better prices and shorter delivery times. Despite the stressful market conditions, the Directors believe a silver lining exists in that the Group is actively exploring new markets and new customers searching for a reliable and stable partnership for the purpose of expanding the businesses. These efforts are important because a number of their previous collaborators are succumbing to their own financial problems.
Given that the Group does not incur significant amount of debts, but enjoys a liquidity of maintaining more than HK$700 million cash and bank balances, the Directors are carefully scrutinizing all potential investment opportunities, including merger and acquisition projects, as the current financial tsunami is providing ample opportunities for future growth, especially in the retail market. On the other hand, the Directors are constantly monitoring the level of risks and the stability of the Group's business partners which, at this moment, are as crucial as orders received.
The Group is in the process of reviewing and improving its existing structure, work process and strategy. The Directors are confident that, through new developments, constant innovation and close monitoring of the administrative costs and overheads, strengthened and made possible by the solidarity and full support of its current workforce in close collaboration with the management, it will be possible to control the level of operating costs and hence, improve the productivity.
The Group's proposed wool mill investment, which has been one of the focuses of the Group, is in its final implementation stage. The Directors expect that the project may start around the middle of 2009. The Directors also expect that this venture will bridge the seasonal gap caused, hitherto, by the Group's strength in producing lighter garments production and the lack of comprehensive winter apparel items to make balanced utilization of the production facilities of the Group throughout the year.
On the retail business, despite the impact of the recent economic contraction, the Group experienced a mild growth in turnover as compared to 2007 while maintaining the satisfactory gross profit margin of approximately 65.5%. For 2009, the Group will continue the same strategy of innovation, development and cost-consciousness. The Group will continue to open new stores, to enhance and diversify the fashion design and collections, to promote strong recognition of the Group's brands, both in China and selected overseas markets.
Despite the Directors' belief that the shares of the Company are grossly undervalued with low trading prices, the Directors will continue to adopt a consistent dividend policy as a sign of acknowledgement of the unwavering support of the shareholders.
The CEO's view on the global economy and its impact on the company
The present financial tsunami that has seen the worst global recession in decades has impacted everyone and it is a stressful reality that has to be faced and dealt with. No one would deny that the financial system is in crisis and that things need to change.
Given the current economic situation, regardless of size or status, only those with total flexibility, solid financial foundations, real business strategies, and strong management will survive, and the companies who weather this unprecedented crisis will have proven their mettle as real players on the international field.
I consider this moment in time as a challenge that offers a great opportunity for the China Ting group to remain a top player in the textile fashion field. As the present difficulties cause financially weaker and badly managed companies to crumble and collapse, our expertise, coupled with our strong financial standing, place us in a unique position to overtake our competitors and create more value for our group.
In the retail sector, we are also accelerating reforms to achieve our expansion strategy of an additional 1,000 new stores to our existing network within the next 3 to 5 years. For the higher end brands, the focus will be on enhancing the brands' visibility and specific training for sales staff. For our two younger brands, the group will invest in a bigger network of stores across a wider range of cities in China, stressing on lower costs, more affordable prices, and a more prolific choice of products.
I see the impact as a silver lining that will eventually enable China Ting to play a more significant role in its future OEM and ODM businesses globally.
About Mr Ting Hung Yi
Mr. Ting Hung Yi, aged 48, is an executive Director and the Chief Executive Officer of the Group. A graduate, in 1987, of the Zhejiang Sci-Tech University, formerly known as Zhejiang Institute of Silk Textiles, Mr. Ting was the general manager of a reputed Hong Kong fashion garments trading company from 1991-2002 prior to joining the group. This extensive experience in the silk and textile fashion industry as well as in international business management stands him in good stead as he assumes responsibilities principally for the strategic development of the Group's businesses in its core sectors of OEM, ODM and retailing.
Contact
Sharon Wood
Vice-President
Investor Relations/Global Development
China Ting Group Holdings Ltd.
27-28 floor, Futura Plaza
111 How Ming Street
Kwun Tong, Kowloon
Hong Kong
Tel: +852-2191-8966 (main)
Tel: +852-2273-7818 (direct)
Fax: +852-2357-1323 (direct)
Email: sharonwood@chinatingholdings.com
Website: http://www.chinatingholdings.com
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