About CHINA WEAVING Company

backgrounds China Textiles Holdings Limited (hereinafter referred to as “China Textiles”) was listed on the main board of the Hong Kong Stock Exchange in December 2011 (code: 3778). The total number of shares listed was 1.01 billion, the market capitalization was HK$0.8 billion, and the capital raised was HK$0.15 billion. The operating entity of China Textiles Group is Jiangxi Jinyuan Textile Co., Ltd. (hereinafter referred to as “Jinyuan”), and Jinyuan is the leading textile yarn manufacturer in Jiangxi Province. Jinyuan acquired Jiangxi Huachun Textile Technology Development Co., Ltd. (hereinafter referred to as “Huachun”) for RMB 0.2 billion in September 2014, and China Textiles added 0.126 billion shares in Hong Kong in November of the same year to raise 0.1 billion HKD as part of the merger and acquisition capital. Huachun is a major textile yarn manufacturer in Jiangxi Province. The merger and acquisition was completed in January 2015. Through the merger and acquisition of Huachun, China Textiles Group's production capacity increased from about 0.39 million ingots to about 0.69 million ingots, and yarn production increased from 0.06 million tons to 0.11 million tons, further consolidating its position as the leading textile yarn manufacturer in Jiangxi Province and diversifying its products. Jinyuan also established a 51% subsidiary in Fengxin County, Jiangxi Province, in December 2014, Xinyuan Special Fiber Co., Ltd. (hereinafter referred to as “Xinyuan”). Xinyuan will be engaged in textile fiber production, which can provide raw materials for Jinyuan and Huachun, thereby reducing production costs, and established Xinyuan Logo Group to begin a vertical integration strategy for upstream business. Overview Jinyuan is a manufacturer of polyester yarn, poly-cotton blended yarn, viscose yarn and cotton yarn, and a leading enterprise in the textile industry in Jiangxi Province. According to the “2015 Jiangxi Top 100 Private Enterprises” private enterprise research report hosted by the Information Office of the Jiangxi Provincial People's Government and the Jiangxi Federation of Industry and Commerce, Jinyuan's revenue ranked third in the textile industry in Jiangxi Province, ranking 100th overall. Jinyuan's yarn ingot production capacity is approximately 0.39 million ingots. Huachun is a large-scale manufacturer of polyester yarn, polyester/cotton blended yarn, hemp gray polyester yarn and cotton yarn located in Jiangxi Province. Huachun's yarn production capacity is about 0.3 million ingots. The Group's total yarn production capacity is about 0.69 million ingots, making it a large yarn producer in Jiangxi Province. We provide a variety of pure yarn and blended yarn products in China. We mainly produce fine and medium yarn to meet the various product specifications of our customers. We supply about 70 combinations of blended yarn products, including products with advanced properties such as combed cotton fiber and ring-spun tight spinning, to provide yarns with more properties. Our production capacity can be allocated from time to time to produce most yarn products according to our production schedule. Geographic layout We are strategically located in Fengtian Economic Development Zone, Fengxin County, Yichun City, Jiangxi Province, so we can enjoy a stable supply of low-cost labor, electricity and water resources, which is essential to our production process. We also benefit from mature infrastructure and convenient road, rail and waterway transportation, thereby reducing our logistics and transportation costs, and enabling us to deliver to our customers on time at competitive prices. Equipment, machines and production facilities We use advanced equipment and machines to produce our products. We import automatic winder machines, which are important to our production process, from an Italian textile machine manufacturer. At the end of 2015, the original cost of all production equipment was approximately RMB 0.653 billion, of which approximately RMB 0.1996 billion or 30.6% was used for machinery and equipment imported from Italy. Our production facility operates 24 hours a day, divided into 3 shifts, and operated 353 days in 2015. Over the past 10 years, our production facilities have operated at an average utilization rate of over 90%. We will continue to further expand our product range, improve product quality and increase production efficiency, all of which help us improve our overall profitability. Management team We are led by an experienced management team with extensive industry knowledge that is critical to our development. Our management team has earned recognition and recognition from the textile industry. The tireless efforts of our senior management team have greatly contributed to the stability of senior management. Most of our senior managers have excellent track records in the textile industry, which enables us to build production facilities and increase production capacity in a short period of time, becoming a leading enterprise in the textile industry in Jiangxi Province.