Texhong Textile Group Limited provided earning guidance for the six months ended 31 December 2021. The board of directors of Texhong Textile Group Limited informed the shareholders of the Company and potential investors that, based on a review of the Group's unaudited consolidated management accounts for the year ended 31 December 2021, the net profit after tax of the Group for the six months ended 31 December 2021 was at a similar level to that for the six months ended 30 June 2021. Given that the operating environment of the Group in the second half of 2021 was similar to that of the first half of 2021, the Board is of the view that the strong performance of the Group was mainly attributable to the continuous recovery of market demand for textile products and strong product gross margin.

Due to the increase in raw material prices, the average product selling prices have been raised accordingly while the raw material purchased in prior months were at a lower cost. As a result, the overall products of the Group had a higher than normal gross margin for the year ended 31 December 2021. The Group will continue to pursue its corporate strategy of optimizing its existing product mix, developing new products that cater for the trend and demand of the market and fully leveraging the advantages of the overseas production plants of the Group in order to further improve the financial performance of the Group.

However, the Board also wishes to emphasize that the performance of the Group can be affected by market environment, including cotton market price, the global development of the COVID-19 pandemic, the foreign exchange rate of Renminbi and the impact of the Sino-US dispute on the global textile market.