Cotton Textile Maker Partly Owned By Chinese Billionaire Expects 1st-Half Profit To Drop (China)

Weiqiao Textile of Shandong,  the world’s largest cotton textile manufacturer, said in a statement on Friday it expects “a significant decrease” in profit for the six months to June 30 compared with a year earlier.

The company is partly owned by the family of Zhang Shiping, who ranked No. 14 on the 2011 Forbes China Rich List with wealth of $4.2 billion. Zhang’s elder daughter Zhang Hongxia is chairman; her father, who has other business interests, owns about third of a holding company that in turn holds about 62% of Weiqiao Textile.  

Profit is expected to fall mainly due to weak domestic and overseas demand for textile products and low cotton prices, the company said.  

Weiqiao Textile said it had 2.8 billion yuan in cash and cash equalivalents on its books as of May 31.   The company’s stock has lost about 40% of its value in the past year.

Sales last year fell by 15% to 15. 2 billion yuan, or $2.4 billion; net profit plunged by 85% to 246 million yuan.  Accounts payable turnover bloated to 84 days compared with 33 a year earlier.  The company’s customers include Itochu, Texwinca and Fountain Set, according to its website.

China’s biggest retailers have generally been reporting lower-than-expected profits this year amid government efforts to slow inflation.