Texhong Textile Group Limited provided consolidated earnings guidance for the Six Months Ended 30 June 2022. The Group is expected to record a net profit of about RMB 1 billion, it is estimated that the net profit of the Group may decrease by more than 20% as compared to the strong net profit of the corresponding period last year. The decrease in net profit of the Group was mainly attributable to the weaker than expected market demand on yarns in the second quarter of 2022 and the decrease in production capacity after the sale of a yarn production facility in China in November 2021, leading to a decrease in gross profit margin and sales volume of yarns.

For the corresponding period last year, Group was benefited from the continuous recovery of market demand for yarns and the higher than normal gross profit margin of yarns attributable to the increasing raw material prices. In addition, the decrease in net profit was also attributable to the exchange loss recorded during the first half of 2022.