About CHINA WEAVING Company

backgrounds China Weaving Materials Holdings Co., Ltd. (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 shares, a market capitalization of HK$800 million, and raised 150 million Hong Kong dollars. The operating entity of China Weaving Materials 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 200 million in September 2014, and China Weaving Materials issued 126 million additional shares in Hong Kong in November of the same year, raising 100 million Hong Kong dollars 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 Textile Group's production capacity increased from about 390,000 ingots to about 690,000 ingots, and yarn production increased from 60,000 tons to more than 110,000 tons, further consolidating its position as a leading textile yarn manufacturer in Jiangxi Province and diversifying its products. In December 2014, Jinyuan also established a subsidiary with 51% shares in Fengxin County, Jiangxi Province, Jiangxi 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 has a production capacity of about 390,000 ingots. Huachun is a large-scale manufacturer of polyester yarn, poly-cotton blended yarn, hemp gray polyester colored yarn and pure cotton yarn located in Jiangxi Province. Huachun has a production capacity of about 300,000 spindles. The group has a total production capacity of about 690,000 spindles, making it a large-scale yarn manufacturer in Jiangxi Province. We provide a variety of pure yarn and blended yarn products in China, mainly producing fine and medium branch yarns to meet the various product specifications of our customers. We supply about 70 combinations of blended yarn products, including products with advanced performance such as combed cotton fibers and ring-spun tightly spun yarn, to provide yarn with more performance. Our production capacity can be distributed from time to time to produce most yarn products according to our production schedule. Geographic layout Our strategic location in Fengtian Economic Development Zone, Fengxin County, Yichun City, Jiangxi Province, allows us to enjoy a stable supply of low-cost labor, electricity and water resources, which are critical to our production process. We also benefit from mature infrastructure and convenient road, rail and water transportation, thereby reducing our logistics and transportation costs and enabling us to deliver goods to our customers in a timely manner at competitive prices. Equipment, machinery and production facilities We use advanced equipment and machines to produce our products. We import automatic winders, 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 about 653 million yuan, of which about 199.6 million yuan, or 30.6%, was used for machinery and equipment imported from Italy. Our production facility operates 24 hours a day, divided into three 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 will 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 won recognition and recognition from the textile industry. The tireless efforts of our senior management team have contributed greatly to the stability of senior management. Most of our senior managers have excellent track records in the textile industry, which allows us to build production facilities and increase production capacity in a short period of time, making us a leading enterprise in the textile industry in Jiangxi Province.