Silk apparel maker China Ting Group Holdings expects its higher-margin retail segment to make a double-digit contribution to revenue in two years, up from 9 per cent now.
The company is also optimistic that it can maintain this year the gross margin of its core manufacturing business, which rose 7.1 percentage points to 35 per cent last year, due to lower production costs on larger volumes.
The Hangzhou-based company is also shifting from Italian to mainland textile materials for its fashion retail business, which can cut up to 50 per cent of material costs, according to chief executive Ting Hungyi.
The company's share price rose 5.31 per cent to $2.475 yesterday after it announced a 97.6 per cent leap in net profit to $380.99 million last year, beating its $369 million forecast during last year's float.
Mr Ting said the company's retail segment, which had a gross margin of 57 per cent last year, would be the main growth driver this year.
The company, which had 302 mainland retail stores at the end of last year, aims to open 63 more this year and 90 next year. It will also open five outlets in the mainland this year to sell home textile products by United States brand Burlington House, from which it obtained exclusive sales and distribution rights. Ten more such stores are due to open next year.
