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Shima Seiki YarnBank
Shima Seiki YarnBank

10th July 2020, Hong Kong

Fountain Set issues profits warning

© Fountain Set Holdings.

© Fountain Set Holdings.

Fountain Set Holdings, one of the world’s largest producers of circular knitted fabrics has issued a profits warning for the six months ended 30 June 2020. The Hong Kong stock exchange listed company issued the following statement this morning”

“The board of directors (the “Board”) of the Company wishes to inform the shareholders of the Company (the “Shareholders”) and potential investors that, based on a preliminary assessment of the unaudited consolidated management accounts of the Group for the six months ended 30 June 2020 and other information currently available to the Board, the Group is expected to record imbalance of profit and loss for six months ended 30 June 2020 as compared to the net profit of approximately HKD90.6 million for the six months ended 30 June 2019. The imbalance of profit and loss is mainly due to the outbreak of the

COVID-19 pandemic globally (“COVID-19”) that as a result of the downturn in the business environment and production operation.”

Despite the difficult operating environment, the board noted that the sales market has been recovering slowly since May 2020. “Besides, the liquidity of the Group remains strong,” Fountain Set said: “The Board estimates that the Group will have approximately HK$ 1,120 million of cash and cash equivalent as of 30 June 2020, as compared to that of about HK$ 940 million as of 31 December 2019. The Group will closely monitor the market situation and the development of the COVID-19 epidemic and will focus on making full use of existing production capacity for the rest of this year to increase profitability and enhance financial stability of the Group.”

Fountain Set (Holdings) Limited is one of the world’s largest and long-established circular knitted fabric manufacturers, a global enterprise that was established out of a small 20-staff dye house in Hong Kong back in 1969. The company’s founding principles, “diligence, frugality, sincerity, and integrity,” inform how it forms partnerships and make decisions.

Chinatex Corporation Limited, a wholly owned subsidiary of COFCO Corporation, has become the largest shareholder of the company since 2012. COFCO Corporation is a state wholly owned enterprise established in the PRC and a direct wholly owned subsidiary of the State-owned Assets Supervision and Administration Commission of the State Council of the PRC. 

“Our focus on R&D serves to foster a close and valuable connection with our partners and enables us to produce top quality knitted fabrics and garments through vertically integrated operations for renowned apparel retailers and brands,” Fountain Set says on its website.

“We invest greatly in superior technology and staff training along with mindfulness of environmental protection and best practices in order to maintain a premier reputation. Our presence in the textile and garment industry continues to focus on providing a great variety of products and services of genuine value to our customers, providing our employees with a challenging career with opportunities for personal development, and presenting our investors and stakeholders with equitable financial growth.”

www.fshl.com/en

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