The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
Stock code: 000726, 200726 Stock abbreviation: Lu Thai A, Lu Thai B Public Announcement No.: 2016-011
Lu Thai Textile Co., Ltd.
The Abstract of the 2015 Annual Report
I. Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding of the operating results, financial
condition and future development planning of the Company, investors are kindly reminded to read the full text carefully on the media
designated by the China Securities Regulatory Commission (the “CSRC”).
This Abstract is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese
version shall prevail.
Statement
Except for the following directors, the other directors all attended in person the board meeting for the review of the Annual Report.
Reason for not attending in
Name Office title Proxy
person
Wang Lei Independent Director For reason of work Zhou Zhiji
Xu Jianjun Independent Director For reason of work Zhao Yao
Non-standard auditor’s opinion
□ Applicable √ Inapplicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the share capital for the
reporting period, which has been reviewed and approved at the board meeting
√ Applicable □ Inapplicable
Share capital increase from the capital reserve
□ Yes √ No
Preliminary plan for profit distribution to the common shareholders for the reporting period which has been reviewed and approved
at the board meeting: Based on the total 954,407,896 shares, a cash dividend of RMB5 (tax included) will be distributed to all the
shareholders for every 10 shares that they hold. No bonus shares will be granted and no capital reserve will be turned into share
capital.
Preliminary plan for profit distribution to the preference shareholders for the reporting period which has been reviewed and approved
at the board meeting
□ Applicable √ Inapplicable
Company profile
Stock abbr. Lu Thai A, Lu Thai B Stock code 000726, 200726
Stock exchange Shenzhen Stock Exchange
Contact information Company Secretary Securities Affairs Representative
Name Qin Guiling Zheng Weiyin
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan
Office address
District, Zibo, Shandong, P.R.China District, Zibo, Shandong, P.R.China
Fax 0533-5418805；5282188-234 0533-5418805
Tel. 0533-5266188 0533-5285166
E-mail address qinguiling@lttc.com.cn wyzheng@lttc.com.cn
II. Brief introduction to the main business or products in the reporting period
(I) Lu Thai, unremittingly taking “creating wealth, contributing to the society, clothing the country and boosting the development of
the world” as its mission, has been practicing the value of “people foremost policy, rigorous scientific attitude, client oriented
principle and integrity for win-win outcome” for a long time. It is devoted to improving and expanding its industrial chain, making it
a renowned textile and garment business group combing cotton breeding, spinning, bleaching and dyeing, neatening, testing, garment
making and marketing. Lu Thai produces and sells middle and high-grade yarn-dyed fabric and dyeing fabric for shirts and garment.
It claimed its fame for its comprehensive management, R&D ability, advanced technology, international development plan and stable
quality. Moreover, it also attaches great importance to improve the added value of its products, explore the emerging market and
renew its service philosophy. With natural fabric as its flagship, multi-component functional fiber fabric as its spearhead and
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The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
wash-and-wear non-ironing technology as its core competency, the company kept a watchful eye on the latest consumption trend.
Great attention was paid to improve its healthy product series so as to satisfy the needs from the diversified and personalized market.
(II) At the current stage, the textile industry of China is encircled by transnational development and is gaining its strength to be
become mature. Lu Thai had already become the largest world renowned manufacturer for high-grade yarn dyed fabric and
premium-brand shirts. It had paved its development pattern featured in going green, low-carbon growth, science and technology and
humanism. Its operation performance was always among the top comparing to its peers. 80% of Lu Thai’s products were exported
over 30 countries and regions in the world, including America, EU and Japan. The export percentage for high-grade yarn dyed
fabric--a self-owned brand attained 70% of its export volume, accounting for 18% of the world’s export market share.
III. Accounting and financial highlights
1. Accounting and financial highlights for the past three years
Does the Company adjust retrospectively or restate the accounting data of previous years due to changes in the accounting policy or
corrections of accounting errors?
□ Yes √ No
Unit: RMB Yuan
Increase/decrease of
2015 2014 current year over 2013
last year
Operating revenues 6,173,322,778.61 6,169,688,792.53 0.06% 6,478,245,029.16
Net profits attributable to shareholders
712,193,243.19 958,725,402.84 -25.71% 999,256,730.65
of the Company
Net profits attributable to shareholders
of the Company after extraordinary 718,263,125.89 876,095,180.42 -18.02% 929,001,764.94
gains and losses
Net cash flows from operating activities 1,027,595,404.34 1,112,095,349.02 -7.60% 1,453,925,021.59
Basic EPS (RMB Yuan/share) 0.750 1.000 -25.00% 1.04
Diluted EPS (RMB Yuan/share) 0.750 1.000 -25.00% 1.04
Weighted average ROE (%) 10.66% 15.39% -4.73% 17.90%
Increase/decrease of
As at 31 Dec. 2015 As at 31 Dec. 2014 current year-end As at 31 Dec. 2013
than last year-end
Total assets 9,091,170,499.22 8,627,671,393.88 5.37% 8,411,948,561.49
Net assets attributable to shareholders
6,837,113,075.58 6,588,772,245.55 3.77% 5,988,054,133.73
of the Company
2. Accounting highlights by quarter
Unit: RMB Yuan
Q1 Q2 Q3 Q4
Operating revenues 1,428,557,406.74 1,513,278,490.42 1,569,500,236.21 1,661,986,645.24
Net profits attributable to shareholders of the
152,714,080.35 191,807,436.37 204,342,167.24 163,329,559.23
Company
Net profits attributable to shareholders of the
131,929,166.88 176,675,290.53 188,913,906.19 220,744,762.29
Company after extraordinary gains and losses
Net cash flows from operating activities -97,329,127.52 457,602,609.70 473,236,649.61 194,085,272.55
Any material differences between the financial indicators above or their summations and those which have been disclosed in
quarterly or semi-annual reports?
□ Yes √ No
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The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
IV. Share capital and shareholders
1. Numbers of the common shareholders and the preference shareholders with resumed voting rights as
well as the shareholdings of the top 10 shareholders
Unit: share
Total number of Total number of
Total number of
common preference
Total number preference
shareholders at shareholders with
of common shareholders
72,743 pervious 70,414 0 resumed voting 0
shareholders at with resumed
month-end of rights at pervious
period-end voting rights at
this Report’s month-end of this
period-end
disclosure Report’s disclosure
Shareholdings of top 10 shareholders
Total shares Pledged or frozen shares
Name of Nature of Shareholding
held at Number of restricted shares held Status of Number of
shareholder shareholder percentage
period-end shares shares
Zibo Lucheng Domestic
Textile non-state-ow
14.69% 140,353,583
Investment Co., ned
Ltd. corporation
Tailun
Foreign
(Thailand) 12.37% 118,232,400 118,232,400
corporation
Textile Co., Ltd.
Central Huijin
Assets State-owned
2.13% 20,315,300
Management corporation
Co., Ltd.
T.Rowe Price
Foreign
Intl Discovery 1.99% 18,972,618
corporation
Fund
China Securities
Finance State-owned
1.64% 15,679,091
Corporation corporation
Limited
Lynas Asia Foreign
1.64% 15,664,475
Fund corporation
First State
Investments
Foreign
Icvc-First State 1.12% 10,714,368
corporation
Greater China
Growth Fund
Hua’an New
Silk Road Domestic
Theme Equity Non-stated-o
1.06% 10,110,000
Securities wned
Investment corporation
Fund
Value Partners Foreign
0.85% 8,156,383
Classic Fund corporation
First State
Foreign
China A Shares 0.77% 7,382,120
corporation
Fund
Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the Company and the actual
Related or acting-in-concert controller. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder as well as sponsor of
parties among shareholders foreign capital of the Company. All of other shareholders are people holding circulating A share or
above circulating B share and the Company is not able to confirm whether there is associated relationship
or concerted action among other shareholders.
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The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
Shareholders conducting
securities margin trading (if No such shareholders
any)
2. Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √ Inapplicable
No preference shareholders in the reporting period
3. Relationship between the Company and its actual controller in the form of diagram
Liu Shizhen
21%
Zibo Lucheng Textile Investment Co., Ltd.
14.69%
Lu Thai Textile Co., Ltd.
V. Discussion and analysis by the management
1. Business review for the reporting period
In 2015, the textile industry faced a complicated external situation characteristic of weak market demand, rising costs of production
factors and a significant cutdown in the cotton import quota. These unfavorable factors further brought up the production costs of
enterprises and weakened the competitiveness in export. Meanwhile, the textile and garment processing industries in Southeast Asia
rose quickly. The Company felt the double pressures from the market and costs. Under the circumstances, the Company, based on its
actual situation and that of the industry, continued to deepen the excellent performance management model, vigorously promoted the
Lu Thai Production System (LTPS), proactively implemented its global planning, accelerated the industrial and informatization
fusion, pushed forward innovation and enhanced corporate culture improvement. As such, the Company managed to maintain a
healthy and steady development trend.
For the reporting period, the Company achieved operating revenues of RMB6.173 billion, operating profits of RMB841 million, net
profits of RMB712 million attributable to shareholders of the Company, and net profits of RMB718 million after deducting
non-recurring gains and losses, up by 0.06%, -19.09%, -25.71% and -18.02% respectively as compared with last year. During the
reporting period, the main business and profit sources of the Company, as well as their composition, remained unchanged.
During the reporting period, substantial promotion had been made in its internationalization layout, management upgradation,
innovation-driven development and qualified service. In 2015, the company won the title of “Pilot Enterprise for Informationalization
Reform of the Textile Industry”, and successively claimed the fame as the “Five-star Enterprise” who had fulfilled its social
responsibility, “National Demonstration Zone for Enterprise Cultural Construction”, “National Benchmarking Enterprise for Quality
and Integrity”, “Demonstration Enterprise for International Layout” and “National Demonstration Enterprise for Technical
Innovation”. It sought its way to go abroad to improve its global layout. With the development of global resource integration getting
momentum with each passing day, the Chinese textile industry goes abroad is an inevitable trend. In order to give full play to the
technology and brand in dyed textile and shirt processing, the company effectively integrated advantageous resources at home and
abroad, efficiently avoided the impacts of potential trade barriers, attained overall international industrial layout and maintained the
company’s leading position in global dyed textile industry. In 2014, the Company successively established Lu Thai (Milan) Office,
Lu Thai (America) Co., Ltd., Lu Thai (Cambodia) Company, Lu Thai (Myanmar) Company and Lu Thai (Vietnam) Company. By
doing so, the company was able to compete fairly in product design, market information gathering, after-sales service and product
manufacturing. During the report period, the 2nd stage of Lu Thai (Cambodia) Company was put into production successfully and
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The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
now is under operation, and the Lu Thai (Myanmar) Company was also on its production phase. The 1st stage spinning production
line of the Vietnam yarn-dyed fabric totaled 30,000 spindles, which had been officially put into production at the end of the reporting
period. The weaving project and production line arrangement are being handled orderly and it is expected to put into production in
the second half year of 2016. What’s more, the production line for shirts in Vietnam is under construction according to the plan.
Lu Thai implemented supreme performance management to improve its production mode (LTPS). The company continuously took
the market as its guidance and qualified service as its center to optimize the R&D process. With integrated resources, the company
managed to provide one-to-one service for strategic clients to win their credibility. Besides, it pushed forward the supreme
performance management broadly for the sake of improving its production mode and polishing the management in a scientific and
systemic manner. By doing so, the company’s system was enhanced, working process was standardized and internal control was
improved. During the reporting period, it passed the management system certification for Integrating IT application with
Industrialization. Its subsidiaries passed the ISO 9000 QMSC and BIC Fine Cotton Planting Certificate. Moreover, Lufeng Weaving
Dye Company and Lu Thai (Cambodia) Company passed the SA8000 Social Responsibility Certificate successively, which pushed
its management to a higher level. Great attention was paid to employee relation management, quality training and “craftsmanship”
spirit cultivation. 10 outstanding staff was selected to group a talent pool in the 1st “Lu Thai Golden Craftman” campaign. The
company also created platforms for the development of its working staff, through which, their mental health and stability could be
maintained. By integrating resources from the supply chain and unremittingly polishing its quality, Lu Thai had made great
achievements in shortening production period, reducing product inventory and improving first pass yield (FPY) through one year’s
hard work.
Lu Thai gave full play to R&D and implemented the innovation-driven policy. Investment in R&D was unceasingly increased, which
currently, occupies 4.87% of its operation revenue. In 2015, its key manufacturing process, major equipment and special working
stages had been automated and intelligentialized. “Automated digital polyester yarn dyeing technology and equipment”, which had
won the first prize of the National Scientific and Technological Awards, is promoted throughout the company. Meanwhile, garment
3D measurement, MTM automatic sample making technology and CAM automate tailor system were brought in by the company to
boost upgradation for each and every producing step. As for new product development, the company maintained one-to-one R&D
matchmaking with TMW, PVH in America and Uniqlo and Ltochu in Japan. Thus, a series of Lu Thai-style engraved products,
featuring high technology content cropped out by making full use of the upstream and downstream resources, and integrated
innovation of the whole product chain was achieved. In 2015, its R&D for technology of warp yarn foam sizing and industrial
application won the “First Prize of Scientific and Technological Development” awarded by China Textile Industry Association.
During the reporting period, the company won one first prize and one second prize of scientific and technological development
awarded by the China Textile Industry Association, one second prize of this sort in the provincial level. Besides, 78 patents were
declared and accepted. The company also participated in enacting 1 national standard. Up till now, it altogether won 42 prizes in the
national and provincial level, including 1 first prize and 2 second prizes of National Scientific and Technological Awards and 8 first
prizes at the provincial stage. 333 patents were applied and accepted, of which, 208 were authorized ones. What’s more, the company
also involved in or taking over 26 standards.
It upgraded itself from “made in Lu Thai” to “created in Lu Thai” to improve its brand influence. The company took full advantage
of its Milan Office in Italy and the subsidiary in America to internationalize its creativity and design and advance its upgradation
from “made in Lu Thai” to “created in Lu Thai”. Now, the sales for self-designed fabric takes up to 9.95% of its total production.
Owning to the product promotion conferences convened in Milan, New York andTokyo, Lu Thai established the long-term strategic
cooperation with world-renowned clients, including Burberry (U.K.), Oxford (USA), Armani and Gucci(Italy), Uniqlo (Japan) and
TAL (Hong Kong), which escalated its brand influence and popularity with time passing by. In 2015, its work “Flower Shadowing”
won the only gold prize in the “International Fabric Design Competition (China) and the 33rd (2016 Spring & Summer) Chinese
Fashionable Fabric Contest”.
Beijing Lutai Youxian E-Commerce Co., Ltd, a subsidiary of Lu Thai, was established in 2014. It is equipped with the O2O mode
featuring “place order online and conduct measurement by visiting the customers”. Customers can make an appointment and order
conveniently through Utailor, Vshop, Jingdong Flagship Store or dial 400 telephone. The company provides customized service for
clients ordering high-grade shirts. Since “UTAILORE”, one of its high-end men’s clothing was pushed to the market, repeat purchase
rate from its customers, old and new, is rising consistently. Now, its business covers the first-tire cities, inclusive of Beijing, Shanghai,
Shenzhen and Guangzhou, which paves the way for the promotion of its garment brands.
At the current stage, Lu Thai, with natural fabric as its flagship, multi-component functional fiber fabric as its spearhead,
wash-and-wear non-ironing technology as its core competency, the latest consumption trend as its guidance and internationalized
industrial manufacturing as its basis, is sparing every effort to attain a global integrated development, so as to ensure its leading
position in the yarn-dyed shirt fabric sector.
2. Significant changes in the main business in the reporting period
□ Yes √ No
3. Products contributing over 10% of the main business revenue or profit
√ Applicable □ Inapplicable
Unit: RMB Yuan
Operating Gross profit Operating Operating profit: Gross profit
Product Operating profit
revenue margin revenue: YoY YoY +/-% margin: YoY
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The Abstract of the 2015 Annual Report of Lu Thai Textile Co., Ltd.
+/-% +/-%
Fabric 4,497,661,649.68 598,668,510.91 29.54% 2.26% -18.13% -2.00%
Shirts 1,169,174,322.30 157,081,373.29 29.64% 6.96% -20.46% -3.08%
4. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes √ No
5. Significant YoY changes in the operating revenues, operating costs and net profits attributable to the
common shareholders or their composition
□ Applicable √ Inapplicable
6. Listing suspension or termination
□ Applicable √ Inapplicable
VI. Issues related to the financial report
1. YoY changes in the accounting policy, accounting estimation and measurement methods
□ Applicable √ Inapplicable
No changes
2. Retrospective restatements due to correction of significant accounting errors in the reporting period
□ Applicable √ Inapplicable
No such cases
3. YoY changes in the consolidation scope
√ Applicable □ Inapplicable
The Company incorporated a new wholly-funded subsidiary—Lu Thai (Vietnam) Textile Co., Ltd.—in the current year.
4. Explanation by the Board of Directors and the Supervisory Committee concerning the “non-standard
auditor’s report” issued by the CPAs firm for the reporting period
□ Applicable √ Inapplicable
Board Chairman: Liu Zibin
Lu Thai Textile Co., Ltd.
30 March 2016
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