Amid the many industries in which China dominates globally, textile manufacturing is one with the most growth potential. China ranks first in the world in the manufacturing and distribution of linen and textile products. The first half of 2009 saw a 9.4% increase in annual Chinese yarn output (now at 10.962 million tons per year). Over the next 5-10 years, demand is expected to increase substantially, with potential market demands of over $20 billion dollars, $4 billion of which is attributable to China alone.
One company contributing to and benefiting from the rapid development of China’s growing textile industry is China Linen Textile Industry, Ltd. (OTCBB: CTXIF). Engaged in the business of production and distribution of various types of linen products, CTXIF ranks among the country’s leading manufacturers in the industry (CTXIF sells 40% of its product within China and the rest overseas to various parts of Europe).
Earlier this week CTXIF released very positive annual results with net revenue increasing 31.2% year-over-year and net income jumping nearly 63% to $6.02 million or $0.30 per share compared to 2008. This growth trend can be attributed to a recipe of a growing consumer base, continued R&D and expansion, and a brand name just beginning to emerge into the mainstream market. CTXIF expects its brand name to gain even more consumer loyalty from increased quality in its products due to the new Heilongjiang Research and Development Center.
Clearly the markets have not factored in the expected double digit growth in 2010 into the company’s current share price, currently just $1.75. With a pending NYSE Amex uplisting, CTXIF is well positioned to provide investors considerable upside.
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