Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
Stock Code: 000726, 200726 Stock Name: LTTC, LTTC-B Announcement No. 2021-012
Bond Code: 127016 Bond Name: LTTC Convertible Bonds
LU THAI TEXTILE CO., LTD.
ANNUAL REPORT 2020 (SUMMARY)
Part I Important Notes
This Summary is based on the full Annual Report of Lu Thai Textile Co., Ltd. (together with its consolidated subsidiaries, the
“Company”, except where the context otherwise requires). In order for a full understanding of the Company’s operating results,
financial position and future development plans, investors should carefully read the aforesaid full text, which has been disc losed
together with this Summary on the media designated by the China Securities Regulatory Commission (the “CSRC”).
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
√ Applicable □ Not applicable
Bonus issue from capital reserves:
□ Yes √ No
The Board has approved a final dividend plan for ordinary shareholders as follows: based on 858,132,322 shares, a cash dividend of
RMB0.50 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either profit or capital
reserves.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese versions shall prevail.
Part II Key Corporate Information
1. Stock Profile
Stock name LTTC, LTTC-B Stock code 000726, 200726
Stock exchange for stock listing Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Zhang Keming Zheng Weiyin and Li Kun
Address 81 Songling East Road, Zichuan District, 81 Songling East Road, Zichuan District,
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
Zibo City, Shandong Province, P.R.China Zibo City, Shandong Province, P.R.China
Fax 0533-5418805 0533-5418805
Tel. 0533-5277008 0533-5285166
Email address zhangkeming@lttc.com.cn wyzheng@lttc.com.cn，likun@lttc.com.cn
2. Principal Activities or Products in the Reporting Period
Lu Thai has always adhered to its mission of “creating wealth, contributing to the society, clothing the world and weaving our way to
every corner of the globe”, as well as to its values of “people foremost po licy, rigorous scientific attitude, client oriented principle
and integrity for win-win outcome”. It has gradually become a textile and garment enterprise group with comprehensive and vertical
production capacities integrating spinning, bleaching and dyeing, weaving, afterfinish and clothing manufacture. Lu Thai produces
and sells middle and high-grade yarn-dyed fabric, dyeing fabric, functional fabric and knitted fabric for shirts, as well as garment. It
claimed its fame for its comprehensive management, R&D ability, advanced technology, stable quality and international operations.
Moreover, it also attaches great importance to improving the added value of its products, explore the emerging market and renew its
service philosophy. Lu Thai has become the world’s largest high-grade yarn dyed fabric producer and a world-class premium shirt
provider. It had paved its development pattern featured in going green, low-carbon growth, science and technology and humanism.
About 60% of Lu Thai’s products are exported to over 60 countries and regions including America, the EU and Japan. At present, the
Company's capacity of yarn dyed fabric has made up 18% of the market of global yearn dyed fabric for medium and high-end shirts.
Moreover, the Company has established strategic partnership with renowned brand owners at home and abroad.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
2020-over-2019
2020 2019 2018
change (%)
Operating revenue 4,751,222,464.14 6,801,381,448.94 -30.14% 6,879,058,813.93
Net profit attributable to the listed
97,308,593.36 952,386,011.49 -89.78% 811,526,477.83
company’s shareholders
Net profit attributable to the listed
company’s shareholders before exceptional 20,039,094.03 662,416,013.00 -96.97% 805,197,824.28
gains and losses
Net cash generated from/used in operating
593,535,922.89 1,086,110,575.51 -45.35% 1,430,341,663.16
activities
Basic earnings per share (RMB/share) 0.11 1.11 -90.09% 0.90
Diluted earnings per share (RMB/share) 0.11 1.11 -90.09% 0.90
Weighted average return on equity (%) 1.26% 12.96% -11.70% 11.24%
Change of 31
December 2020 over
31 December 2020 31 December 2019 31 December 2018
31 December 2019
(%)
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
Total assets 12,129,903,960.65 11,885,431,553.08 2.06% 10,537,759,811.84
Equity attributable to the listed company’s
7,687,577,590.72 7,697,135,324.92 -0.12% 7,146,548,467.86
shareholders
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1,252,428,965.20 1,034,315,115.59 1,083,514,157.78 1,380,964,225.57
Net profit attributable to the listed company’s
103,518,808.50 40,600,770.72 -48,455,060.39 1,644,074.53
shareholders
Net profit attributable to the listed company’s
103,615,262.08 4,490,331.09 -59,285,564.88 -28,780,934.26
shareholders before exceptional gains and losses
Net cash generated from/used in operating activities 145,916,523.77 63,475,741.92 219,056,724.96 165,086,932.24
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially f rom what
have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
Number of preferred
Number of Number of ordinary Number of preferred
shareholders with resumed
ordinary shareholders at the shareholders with resumed
59,633 58,570 0 voting rights at the month-end 0
shareholders at month-end prior to the voting rights at the
prior to the disclosure of this
the period-end disclosure of this Report period-end
Report
Top 10 shareholders
Shareholdi Total shares Shares in pledge or
Restricted frozen
Name of shareholder Nature of shareholder ng held at the
shares held
percentage period-end Status Shares
Domestic
Zibo Lucheng Textile Investment Co.,
non-state-owned legal 16.36% 140,353,583 0
Ltd.
person
Tailun (Thailand) Textile Co., Ltd. Foreign legal person 13.78% 118,232,400 118,232,400
Central Huijin Assets Management Co., State-owned legal
2.37% 20,315,300
Ltd. person
Domestic
China Securities Finance Corporation
non-state-owned legal 1.75% 15,021,260
Limited
person
Domestic
National Social Security Fund Portfolio
non-state-owned legal 1.10% 9,450,051
413
person
Zhang Ying Domestic natural person 0.69% 5,910,600
Zhong Ou China Securities Asset
Other 0.61% 5,235,900
Management P lan
Dacheng China Securities Asset
Other 0.61% 5,235,900
Management P lan
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
Harvest China Securities Asset
Other 0.61% 5,235,900
Management P lan
GF China Securities Asset Management
Other 0.61% 5,235,900
Plan
Zibo Lucheng Textile Investment Co., Ltd. is the largest
shareholder of the Company and the actual controller. Tailun
(Thailand) Textile Co., Ltd. is the second largest shareholder
as well as sponsor of foreign capital of the Company. All of
Related or acting-in-concert parties among the shareholders above
other shareholders are people holding public A share or public
B share and the Company is not able to confirm whether there
is associated relationship or concerted action among other
shareholders.
Shareholders involved in securities margin trading (if any) N/A
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
5. Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of t his
Report’s approval or were due but could not be redeemed in full?
No.
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
In 2020, the coronavirus pandemic brought enormous impact to the world economy and China's export industry. Coupled with the
international trade friction, China's export-oriented textile and apparel companies suffered from one disaster to another. Though the
Company proactively adjusted its product structure and increased the production and sales of protective products, it was still difficult
to ease the major impact on the Company of the dramatic decline in European and American needs, causing a considerable decrease
in the operating results of the Company. For the Reporting Period, the Company achieved operating revenue of RMB4,751 million ,
operating profit of RMB83 million, a net profit attributable to the Company as the parent of RMB97 million, and a net profit
attributable to the Company as the parent before exceptional gains and losses of RMB20 million, respectively down 30.14%, 92. 68%,
89.78% and 96.97% when compared to last year.
No changes occurred to the Company’s core businesses, primary products, business models and major growth drivers in the
Reporting Period. As an advantaged enterprise in the textile manufacturing industry, the Company was granted with “Top 30 Chinese
Printing and Dyeing Enterprise” by China Dyeing and Printing Association (CDPA), “Top 100 Private Enterprises with the Highest
Brand Value of Shandong Province of 2020” by Shandong Council for Brand Development, “High-End Brand Builders in the
Manufacturing Sector of Shandong Province” by Shandong Administration for Market Regulation, "Excellent Institution Fostering
China's Corporate Culture during the 13th Fiver-year Plan Period" by China Corporate Culture Institute, and "Advanced Enterprise of
Party Building in the National Textile Industry" by China National Textile and Apparel Council (CNTAC) and Chinese Association
for Textile Enterprise Culture Construction. During the Reporting Period, the Company mainly completed the following tasks:
(I) Coordinated Response to COVID-19 and Rapid Resumption of Work and Production
In 2020, under extreme circumstances of epidemic prevention and control, the Company made quick response, formulated detailed
plans for fighting against the pandemic and resuming work and production, and took multiple measures to ensure employees could
resume their work and production soon, who displayed strong execution and cohesion.
(II) Customer-centric Arrangements
In 2020, the coronavirus pandemic had massive impact on China's industries, especially export-oriented textile and apparel
enterprises. To deal with the crisis and market changes, the Company proactively adjusted its product structure and market structure,
intensified promotion to boost sales in the domestic market, and vigorously expanded markets for protective products. Through
online promotional meetings, customized promotional meetings and designer promotional meetings, it provided customers with
one-stop solutions and value-added service, and deepened cooperation with strategic customers. Besides, the Company strengthened
development of business wear orders, proactively boosted service of group purchase and customer-tailored production, and expanded
cooperation with Tmall and Biyao Mall, maintaining stable production and operation.
In terms of marketing, the Company expanded potential markets and customers at home and abroad, and launched customization
service of NARCISU shirts on Biyao Mall, achieving good results.
(III) Improvement of Business Layout and Structural Adjustment to Products
During the Reporting Period, the Company took measures to ensure normal businesses with traditional customers, strengthened the
development of products and customers, closely followed the actual demands of customers, relied on the new development paradigm
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, and positively addressed
the challenge of business decline oriented by “new products and new markets”.
During the Reporting Period, the Company issued convertible corporate bonds of RMB 1.4 billion for new projects and
replenishment of working capital. On top of yarn, yarn dyed fabric, printed and dyed fabric, and shirts, it extended its business to
functional fabric and knitted fabric. By doing so, it enriched its product structure, formed a multi-layered product matrix including
mature products, growth products and exploration products, and developed different styles such as formal wear, casual wear, a nd
comfortable and fashionable clothing, meeting customer needs. In addition, based on the situation of the pandemic in regions where
major foreign customers were located, the Company developed and launched protective products successively, meeting their
requirements for basic protection, environmental protection and reusability, and winning market recognition.
It responded to the trade friction with a positive attitude, made full use of the edges in the industrial layout at home and abroad, and
planned and adjusted the order production bases of some strategic customers in a coordinated manner, achieving good effect.
(IV) Deepen Management Reform and Focus More on R&D Innovation
First, the Company further adjusted and improved the organizational management structure, established six product lines, name ly
yarn, yearn dyed fabric, printed and dyed fabric, functional fabric, knitted fabric and garment, and carried out whole-process overall
operation management with the product lines as the mainstay to improve the organizational capabilities and cost control capab ilities
and help achieve the operating goals.
Besides, the Company vigorously promoted integrated product development, enhanced the cultivation of the business engineering
capacity and management process capability, and bolstered the coordinated R&D system covering marketing, R&D, manufacturing,
supply chain, finance and economy, and quality operation. Moreover, with products as platforms, it established teams of forma l wear,
casual wear, wrinkle-resistant fabric, functional fabric and materials, and customized development to rapidly meet the diversified and
personalized needs of customers for developing products within a short delivery time in a targeted manner.
During the Reporting Period, the Company implemented 31 corporate-level product development projects and promoted process
upgrading, energy conservation and reduction of energy consumption. Meanwhile, it launched the customized development of fabr ics
targeting strategic and key accounts. By building two innovative cooperation platforms and four technical cooperat ion platforms, it
mainly invested in project R&D of wrinkle-free eco-fabrics, four-sided stretch fabrics, renewable and biodegradable fabrics, and
anti-virus protective fabrics and apparel. During the Reporting Period, the Company was granted with 16 patents, with the “Textile
Fabric Color Digitization Key Technology and Industrialization” project winning the title of “Shandong Textile and Apparel
Industrial New Technology (Achievement)” by the Department of Industry and Information Technology of Shandong P rovince. It
was once again certified as a national high-tech enterprise and a national demonstration enterprise of green industrial product design,
and passed the review of the national manufacturer in single item. Two projects under the national key R&D p lan during the 13th
Fiver-year Plan period and one development and construction project of Shandong Peninsula Self-dependent Innovation
Demonstration Area (Zibo), undertaken by the Company, passed the assessment and review for the year 2020. In the future, it will, in
line with its corporate strategy, boost product development, establish a sound operating procedure and management standards for
R&D projects, and build an efficient R&D system.
(V) Active Response of Overseas Subsidiaries to the COVID-19
As the pandemic developed in foreign countries, the Company experienced increasing impact on its overseas business. Its overseas
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
production bases assumed the major task of operation development while responding to COVID-19. During the Reporting Period, its
overseas production bases actively responded to COVID-19 as required by countries where they were located, and succeeded in
preventing infection in factories. In terms of production operation, the Company promoted local management, adjusted the product
structure and expanded product types, recording profit in all the three garment production bases.
During the Reporting Period, the Company faced up to the “crisis” and organized all its employees to hold the “100-Day Competition”
activity, aiming to improve the business and technological capabilities of all its employees in their respective areas. It rose to the
crisis, took the initiative to implement reform and boosted capability cultivation and strength accumulation, laying a solid foundation
for long-term development after the pandemic.
2. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
√ Applicable □ Not applicable
Unit: RMB
Gross
Product Operating YoY change in operating YoY change in operating YoY change in gross
Operating revenue profit
category profit revenue (%) profit (%) profit margin (%)
margin
Fabric 3,371,261,899.44 48,175,505.97 20.79% -31.34% -92.83% -9.73%
Shirts 867,383,762.52 40,149,040.80 23.99% -32.77% -75.55% -5.76%
4. Business Seasonality that Calls for Special Attention
□ Yes √ No
5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable to the Listed
Company’s Ordinary Shareholders or Their Compositions
√ Applicable □ Not applicable
In 2020, the coronavirus pandemic exerted a huge impact on the export industry. With a slowdown in the macro-economy and a
decline in market demand both at home and abroad, the Company overcame difficulties, prioritized both pandemic control and
production resumption, and actively explored new markets. That said, the pandemic still hit the Company’s production and
operations badly. For the Reporting Period, the Company recorded operating revenue of RMB4,751 million (a 30.14% year-on-year
decrease); cost of sales of RMB3,738 million (a 21.97% year-on-year decrease); and a net profit attributable to ordinary shareholders
of RMB97 million (an 89.78% year-on-year decrease).
6. Delisting
□ Applicable √ Not applicable
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Lu Thai Textile Co., Ltd. Annual Report 2020 (Summary)
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
In accordance with the Accounting Standards for Business Enterprises No. 21 – Leases (“New Lease Standards”) revised and issued
by the Ministry of Finance on December 7, 2018, the Company has made relevant changes about the previous fiscal policies. This
fiscal policy change is the reasonable change made according to the up-to-date rules issued by the Ministry of Finance and it meets
the provisions of relevant laws and regulations. Implementation of the changed fiscal policies can objectively and fairly ref lect the
financial condition and operation result of the Company in 2021 and subsequent years, and no significant impact on the financial
statements of the Company will occur accordingly.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
During the Reporting Period, the Company incorporated one subsidiary Beijing Zhishu Trading Co., Ltd., transferred the subsidiary
Fengshou Cotton Industry for sale and cancelled the subsidiary Beijing Luthai Prime Fabric E-commerce Corp.
Chairman of the Board: Liu Zibin
Lu Thai Textile Co., Ltd.
31 March 2021
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