Mainboard-listed Li Heng Chemical Fibre Technologies, the China-based manufacturers of high-end nylon fibres, today announced that for the half year ending 30 June 2010 (1H10), net profit rose 159% to RMB124.8 million ($24.9 million) from RMB48.2 million.

Revenue increased 41.5% to RMB1,310.2 million compared to RMB925.8 million its previous corresponding financial reporting period (1H09), on improving demand and higher average selling prices (ASPs) of nylon yarns in China on the back of an improved textile and garment industry.

In tandem with higher revenue, gross profit for 1H10 was RMB191.6 million, 76.2% higher as compared to 1H09 while gross profit margin improved to 14.6% from 11.7%.

Li Heng says the operating environment of the textile and garment industry in China continued to improve and demand for the group’s high-end nylon yarn products have recovered gradually since the global economic slowdown from the fourth quarter of 2008.

The group’s overall ASPs has improved RMB16,440 per metric ton (mt) in 1H09 to RMB24,880 per mt, representing an increase of 51.3%.

The increase in ASPs was also due to the group’s ability to partially pass on higher raw material cost to its customers. The higher cost of the main raw material, imported nylon polyamide chips (PA chips) was partly due to anti-dumping tariffs imposed since April 2010.

In meeting customers’ demand and market changing trends, Li Heng shifted the product mix to more nylon yarns of finer measurements which carry less weight and as such, overall sales volume decreased from 56,300 mt in 1H09 to 52,700 mt in 1H10.

Li Heng believes its expansion plans will enlarge its revenue and profit base and partially mitigate the negative effect of the risks of an increasing raw material cost and lay a strong foundation for long term, sustainable growth.