HK Stock Market Move | TEXHONG INTL GP (02678) rose more than 3%, with an expected 75% increase in mid-term net profit year-on-year. The company's overseas production capacity and low-cost procurement advantages continue.

TEXHONG INTL GP (02678) rose more than 3%, as of the deadline, it rose 2.95%, to HK$6.64, with a turnover of HK$199.95 million. In terms of news, recently, TEXHONG INTL GP announced that it is expected to record a net profit of approximately RMB 4.64 billion for the six months ending June 30, 2026, an increase of about 75% compared to the six months ending June 30, 2025. The announcement stated that the substantial increase in expected net profit is mainly due to the robust demand in the textile market in the first half of 2026, the group's business orders are sufficient, product sales volume and production capacity utilization have improved compared to the first half of 2025, resulting in a significant increase in gross profit. In addition, benefiting from the continuous optimization of the group's asset-liability structure, the financial expenses in the first half of 2026 have also decreased significantly compared to the first half of 2025. China Jin Report pointed out that the company's gross profit margin is expected to increase year on year. During the rise in cotton prices, the company's early purchase of low-priced raw material inventory accompanied by product price increases is expected to release inventory price difference benefits; at the same time, the price difference between domestic and foreign cotton prices in the first half of 2026 is maintained at around 2,000-3,000 yuan per ton, continuing the low-cost procurement advantage of the company's overseas capacity. With the growth in orders and the improvement in production capacity utilization, fixed costs are further diluted, coupled with the continuous promotion of technological innovation to reduce costs, it is expected that the company's operating leverage will be accelerated to release, driving an improvement in the gross profit margin year on year.