Today, Shandong's Ruyi (002193, closing price of 7.63 yuan) announced its semi annual report.

In the first half of this year, Shandong realized its operating income of 262 million yuan, an increase of 33.26% over the same period last year, a net profit of 15 million 533 thousand and 600 yuan, an increase of 19.01% over the same period last year, a profit of 0.10 yuan per share and a 2.77% return on net assets.

A number of factors led to a decline in gross margins.

In the first half of this year, China's textile industry was affected by various factors such as the international economic weakness, domestic macroeconomic regulation and control, production factor price rising, south snow disaster and Sichuan earthquake. The industry situation is facing a grim situation. The overall growth rate has slowed down, and many companies in the industry have even suffered losses in the first half of.

Because Shandong's products are in the middle and high end of the woolen woolen industry, the industry has strong market competitiveness and product cost pfer ability. Only in the overall unfavorable environment of the industry can the company's profits continue to grow, but gross profit margins still drop, from 30.46% in the same period last year to 6.39%, reaching 24.07% in the first half of this year, and still remain at a high level in the industry.

RMB appreciation to increase financial pressure

From the analysis of sales structure, Shandong Ruyi vigorously develops foreign trade.

In 2008 1~6, the company achieved an external sales revenue of 165 million yuan, accounting for 63% of sales revenue, an increase of 46.60% over the same period last year, while the domestic sales revenue for the same period was 85 million 602 thousand and 500 yuan, an increase of only 7.20% over the same period last year.

Since 2008, the appreciation of RMB has been accelerating. For Shandong's export oriented enterprises, there is no small business and financial pressure.

In the 1~6 month of this year, the company's exchange losses were as high as 3 million 227 thousand and 900 yuan, accounting for 16.33% of the total profits, while the exchange loss was only 391 thousand and 800 yuan in the same period last year. Therefore, how to deal with the appreciation of the RMB and reduce exchange losses has become a major problem that restricts the rapid development of the company.

Fundraising projects will go into operation in the second half year

In November 2007, Shandong openly offered 20 million shares to the public and raised a total of 252 million yuan for functional and ecological woolen fabrics.

As of June 30th, 238 million yuan has been used to raise funds.

At the same time, the company has added 4 million meters high grade worsted and woolen production line at the same time, and is expected to be put into operation by the end of this year, so that the production capacity of the company can reach an annual output of 16 million meters.

Analysts pointed out that although the textile industry is now in a downward cycle, but because the company has strong technical strength, leading position in the industry, the order is good, so it can maintain normal production and operation, and the new project's production is undoubtedly a good for the long-term development of the company, which can alleviate the problem of insufficient capacity of the company, and the stock price may have a good performance.