China Linen Textile (CTXIF) research, news, and more from GeoInvesting

Company description

Fri, 08 Apr 2011 04:00:00 GMT

China Linen Textile Industry, Ltd. (http://www.chinalinentextile.com/) is principally engaged in the production and sale of linen yarn and various types of linen fabric. The Company is also involved in consultation and R&D related to linen technology and linen products. The Company carries on all of its business activities through its subsidiary, Heilongjiang Lanxi Sunrise Linen Textile Industry Co., Ltd. ("Lanxi Sunrise"), established in June 2002 and located in Lanxi County, the "Homeland of Flax in China," near Harbin City in China. Lanxi Sunrise has one yarn-spinning factory, one bleaching factory and two fabric weaving factories in its 35,120 square meters of building area with a staff of 1,400 and 430 sets of world-class, advanced production machinery. Annual production capacity totals approximately 2,220 tons with 50 different types of yarn and 10 million meters of fabric with 110 types. Approximately 50 percent of its products are exported to more than 10 countries.

Comments & Business Outlook

Tue, 15 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Q3 2011 revenues increased 15.2% to $16.2 million.
Q3 2011 gross profit increased 25.5% to $5.5 million, gross margin up 280 basis points to 34.3%
Q3 2011 net income increased 8.2% to $3.1 million; diluted EPS was $0.45.

Mr. Gao Ren, Chairman and CEO of China Linen, said: "I am pleased to report that the third quarter of this year was marked by continued growth in revenue and net income despite our strong performance in the same period last year. For the first nine months, we expanded our sales and distribution channels for our linen fabric and yarn. While linen fabric sales increased 21.7%, we were able to expand the sales of linen yarn by 598.9%, which helps to drive both top and bottom line expansion. During the first nine months, we moved closer to our objective of becoming a more fully integrated linen producer by bleaching our own products and introducing high margin color yarn products. International sales remained robust, accounting for 58% of revenues as global fashion industry increasingly utilized pure linen and blended linen products."

Notable Share Transactions

Thu, 20 Oct 2011 04:00:00 GMT

HARBIN, China, October 20, 2011 /PRNewswire-Asia/ -- China Linen Textile Industry, Ltd. (OTCQB: CTXIF) ("China Linen" or the "Company"), one of China's leading linen fabric and linen yarn producers and exporters, today announced that the executive management team, including the Chairman of the Board and Chief Executive Officer Ren Gao, Chief Financial Officer Jodie Zheng Wehner, Vice General Manager Yongfeng Ma have increased their ownership by approximately 70,000 shares or 1.2% of total outstanding shares purchased in the open market, at an average price of $2.42. Since China Linen is a foreign private issuer, its officers and directors are not subject to Section 16 of the Securities Act of 1934 and therefore are not required to file a Form 4 in connection with acquisitions of China Linen's stock.

"The purchases in the last quarter have been approved by the Board and reflect the shared confidence we have in China Linen's long-term opportunity to be one of the leading pure linen fabric providers in the world," Mr. Ren Gao, CEO and Chairman of China Linen commented. "We plan to consistently purchase in the coming quarters should China Linen's stock price stay at a deeply discounted value of our operations."

Comments & Business Outlook

Mon, 15 Aug 2011 04:00:00 GMT

Second Quarter Results

Q2 2011 revenues increased 82% to $16.0 million.
Q2 2011 gross profit increased 116% to $5.9 million, gross margin up 572 basis points to 36.5%
Q2 2011 net income increased 80% to $3.5 million; diluted EPS of $0.51 vs. $0.33 a year ago.
Raised full year revenue guidance from $58-63 million to $60-64 million, raised full year net income guidance from $11.5-12.6 million to $12-13 million.

Mr. Gao Ren, Chairman and CEO of China Linen, commented: "I am pleased to report that the second quarter of this year was marked by substantial growth in revenue and net income compared to the same period last year, resulting from sales volume increases and price improvements of both linen fabric and linen yarn. The integration of Lanxi Tianxianfang Linen Co. is complete and we continue to realize cost saving benefits from this acquisition. Through the addition of a bleaching factory and our upgraded linen yarn dyeing facility, we move closer to our long term goal of becoming a fully integrated linen producer, which should further drive margin expansion and allow us to offer a full range of linen products and services to our customers. International sales remained robust, accounting for 58% of revenues in the second quarter, as fashion trends across Europe and Asia continued to favor pure linen products and accessories, and consumers increasingly recognized the quality and value of these products," Mr. Gao concluded.

Liquidity Requirements

Wed, 15 Jun 2011 04:00:00 GMT

We anticipate that the combination of our sales and collection of accounts receivables, customer deposits and proceeds from bank and shareholder loans will generate sufficient cash flow to sustain our working capital needs. However we may require other sources of capital.

Comments & Business Outlook

Tue, 24 May 2011 04:00:00 GMT

First Quarter Results:

Q1 2011 revenues increased 79% to $15.8 million.
Q1 2011 gross profit increased 109% to $5.7 million, gross margin up 507 basis points to 36.0%
Q1 2011 net income increased 50% to $3.2 million; diluted EPS of $0.46 vs. $0.36 a year ago.

"The first quarter of this year was marked by continued growth in revenues and net income, which benefitted from both volume increases and price improvements. We successfully expanded the sales and distribution channels for our linen fabric and yarn during the past year and utilized new capacity brought on-line through the Lanxi Tianxianfang Linen Co. acquisition. We also began to realize cost saving benefits from the integration of this business," said Mr. Gao Ren, Chairman and CEO of China Linen. "Through the addition of a bleaching factory and our recently upgraded linen yarn dyeing facility, we are becoming a vertically integrated linen producer, which enables to us to capture more of the value chain while meeting increasing demand for our products both in China and abroad. International sales comprised 58% of revenues and were driven by growth in India and Turkey, including new markets such as Spain and Thailand, while higher domestic demand for linen products also drove revenue growth."

Up-Listing Watch

Mon, 25 Apr 2011 04:00:00 GMT

LANXI COUNTY, China, April 25, 2011 /PRNewswire-Asia-FirstCall/ -- China Linen Textile Industry, Ltd. (OTC Bulletin Board: CTXFD) ("China Linen" or the "Company"), a China-based company engaged in the production and sale of linen yarn and various types of linen fabric, today announced Mr. Xu Jianzhong and Mr. Xu Jixiang have joined China Linen's Board of Directors, effective April 20, 2011 and Mr. Teng Yunhai has resigned as director of the Board of the Company.　

"It is our pleasure to have Mr. Xu Jianzhong and Mr. Xu Jixiang join China Linen's Board of Directors. They bring firsthand experience in the textile industry to our board," said Mr. Gao Ren, Chairman and CEO of China Linen. "We look forward to them helping us improve our corporate oversight and governance policies, increasing our transparency to the investment community. The appointment also brings China Linen a step closer to meeting the requirements for being listed on a major US stock exchange."

Comments & Business Outlook

Mon, 04 Apr 2011 04:00:00 GMT

SUMMARY FINANCIALS

Fiscal Year Ended December 31, 2010 Results (audited)
	2010	2009	CHANGE
Net Sales	$49.1 million	$29.4 million	+67.1%
Gross Profit	$15.2 million	$8.7 million	+74.6%
Net Income	$9.6 million	$5.7 million	+66.9%
EPS (Basic)	$0.47	$0.28
Basic Shares Outstanding	20.3 million	20.1 million
EPS (Diluted)	$0.39	$0.28
Diluted Shares Outstanding	24.9 million	20.1 million

GeoTeam Note: Fourth Quarter 2010 vs. 2009 EPS was $0.05 vs. $0.07.

"We are very pleased with our results for 2010, which included outstanding revenues and earnings growth and improved gross margin," stated Mr. Gao Ren, Chairman and CEO of China Linen. "As a leading producer and exporter of linen in China, we continued to expand markets and produce new and competitive products. We were excited to see increases in demand from both domestic and international markets, for both linen fabric and linen yarn during the year. We were able to add almost 50 new direct customers and open up new markets including India and Turkey. Going forward, we will continue to penetrate European market, expand sales in new markets like India and Turkey, and increase sales domestically.

"2010 marked a number of milestones for China Linen. We completed the purchase of Lanxi Tianxianfang Linen Co., Ltd. which increased our linen yarn and linen fabric production capabilities and also included a bleaching factory, a critical addition to our production process as we aim to become vertically integrated throughout the entire value chain. In December, we commenced operations at our newly upgraded linen yarn dyeing facility to produce higher margin higher demand new products," Mr. Gao continued.

"We remain optimistic into 2011 as macro trends seem to continue to favor the linen industry. While pure linen products are usually considered higher-priced and higher-end products than traditional textile products, record high cotton and chemical fiber prices have closed the price gap between the two. With increased interest and demand for linen products globally, combined with our expanded production capacity and our new capabilities, we are well positioned to take advantage of opportunities to gain market share in the linen industry," concluded Mr. Gao.

Fiscal Year 2011 Guidance

For the fiscal year 2011, the Company expects

revenue to be in the range of $58-63 million
net income to be in the range of $11.5-12.6 million.

Note

On March 30, 2011 the market took effect a 3.5:1 reverse split for the Company's shares. The new symbol on the date was CTXFD. Please note that a "D" has been appended as the 5th character for 20 business days including the effective date. Furthermore, the "F" was moved back in tandem with adding the "D". After 20 business days the symbol will revert back to the original CTXIF.

The above financial results discussion is on a pre-split basis. The pro forma number of ordinary shares and earnings per share in the financial statements reflect a post-split effect.

Comments & Business Outlook

Mon, 29 Nov 2010 05:00:00 GMT

SUMMARY FINANCIALS

Third Quarter 2010 Results (unaudited)
	Q3 2010	Q3 2009	CHANGE
Revenues	$14.0 million	$6.7 million	+109.3%
Gross Profit	$4.4 million	$2.1 million	+114.9%
Net Income	$2.8 million	$1.6 million	+74.9%
EPS (Diluted)	$0.14	$0.08	+74.1%

Nine Months 2010 Results (unaudited)
	Nine-month 2010	Nine-month 2009	CHANGE
Revenues	$31.6 million	$20.6 million	+53.7%
Gross Profit	$9.8 million	$5.7 million	+72.2%
Net Income	$6.9 million	$4.3 million	+59.6%
EPS (Diluted)	$0.34	$0.21	+58.9%

Fiscal 2010 Guidance

Based on the strong results recorded in the first nine months of 2010, Management
raises full year guidance of sales from $38.1 million to $44.0 million
maintains net income guidance of $9.3 million
raises EPS guidance from $0.39 to $0.46 based on 20,215,003 weighted average number of shares outstanding.

Mr. Gao Ren, Chairman and President of China Linen, stated: "China Linen's continued international and domestic market expansion is anticipated to yield additional customers and orders, which will drive incremental growth and support our efforts to further penetrate the existing customer base. We expanded our linen yarn production capacity by approximate 40% and linen fabric production capacity by 26% through the additional of Lanxi Tianxianfang, which provides the foundation to meet our 2011 growth objectives."

Deal Flow

Fri, 19 Nov 2010 05:00:00 GMT

China Linen Textile Industry, Ltd. today announced that it has acquired a 100% equity interest in Lanxi Tianxianfang Linen Co., Ltd. ("Tianxianfang") for approximately $6.7 million. The acquisition will expand the capacity of the Company's two main product lines and enable China Linen to meet its growing customer demand.

China Linen entered into a fixed asset lease agreement with Tianxianfang on July 1, 2010 and has been operating the facility since that date. The acquisition of Tianxianfang includes a 23,358 square foot office building, a spinning production line with 3,000 spindles, bleaching machines and other equipment. The acquisition will increase the Company's line yarn production capacity by approximately 620 ton, or 39%, to 2,220 tons annually, and increase the linen fabric production capabilities by 2.1 million meters, or about 26%, to 10.2 million meters annually. This acquisition is expected to add approximately $4.9 million in revenue and $1.2 million in net income annually, while maintaining gross margins of approximately 30%. In addition, the bleaching factory which was acquired as part of the transaction has an annual capacity of processing 10 million meters of linen fabric, and is expected to generate approximately $1.5 million in additional net income over the next twelve months.

Mr. Gao Ren, Chairman and President of China Linen, stated: "We are very excited to announce the acquisition of Tianxianfang, an important milestone in our goal to become a vertically integrated producer while expanding capacity. By adding a downstream component to our production cycle, we are complementing our core competency while protecting our margin profile. The acquisition will enable us to drive incremental growth by fulfilling more sizeable orders from both domestic and international customers, which we expect to further improve our financial and operational performance."

Deal Flow

Thu, 04 Nov 2010 04:00:00 GMT

China Linen Textile Industry, Ltd., today announced that it has consummated a private placement to a group of institutional and accredited investors for approximately $7 million of 7.5% notes that are convertible into the Company's ordinary shares. The offering will result in gross proceeds of approximately $6.4 million to the Company.

CFO Trail

Mon, 13 Sep 2010 04:00:00 GMT

China Linen Textile Industry announced that it appointed Ms. Jodie Zheng Wehner as the Company's new Chief Financial Officer effective September 1, 2010, replacing Mr. James Qi, whose employment as chief financial officer of the Company was terminated by the mutual agreement of the Company and Mr. Qi effective September 1, 2010.

Comments & Business Outlook

Tue, 31 Aug 2010 04:00:00 GMT

SUMMARY FINANCIALS

    First Quarter 2010 Results (unaudited)

                                       Q1 2010        Q1 2009       CHANGE
    Net Sales                        $8.8 million  $5.5 million     +58.7%
    Gross Profit                     $2.7 million  $1.1 million    +139.0%
    Net Income                       $2.1 million  $1.1 million     +89.8%
    EPS (Diluted)                           $0.10         $0.06     +89.1%


    Second Quarter 2010 Results (unaudited)

                                       Q2 2010        Q2 2009       CHANGE
    Net Sales                        $8.8 million  $8.3 million      +5.7%
    Gross Profit                     $2.7 million  $2.5 million      +7.4%
    Net Income                       $1.9 million  $1.6 million     +22.5%
    EPS (Diluted)                           $0.10         $0.08     +21.8%


    Six-Month 2010 Results (unaudited)

                                     6-Month 2010  6-Month 2009    CHANGE
    Net Sales                       $17.6 million $13.9 million    +26.9%
    Gross Profit                     $5.4 million  $3.7 million    +48.3%
    Net Income                       $4.0 million  $2.7 million    +50.3%
    EPS (Diluted)                           $0.20         $0.13    +49.6%

"We are pleased to report strong revenue and earnings growth during the first half of the year, which resulted from our increased marketing efforts, higher average selling prices for linen fabric, and the strong demand for our linen fabric in both domestic and international markets," stated Mr. Gao Ren, Chairman and President of China Linen. "We have seen an increase in demand from domestic and international customers this year due to the recovery of the global economy and the increasing awareness of the benefits of natural textiles, such as linen, among consumers."

"Our enhanced international market expansion is anticipated to introduce more customers and orders to generate incremental revenues for the balance of 2010. The addition of new production capacity from the lease agreement signed in July 2010 enables us to fulfill more of those orders and improve our 2010 financial performance. Combined with our increased marketing efforts, higher average selling prices for linen fabric, and the strong demand for our linen fabric in both domestic and international markets, these expansion efforts give us confidence in meeting our 2010 revenue and earnings guidance."

Reiterates 2010 revenue guidance of $38.1 million and 2010 net income guidance of $9.3 million, representing anticipated year-over-year growth of approximately 29.6% and 63.2%, respectively.

Comments & Business Outlook

Wed, 21 Jul 2010 04:00:00 GMT

HARBIN, China, July 20 /PRNewswire-Asia--FirstCall/ -- CTXIF announced that it has expanded its linen yarn production capacity and added the capability to bleach linen fabric by entering into a Fixed Asset Lease Agreement with Lanxi Tianqianfang Linen Co., Ltd. (the "Lessor").

We believe the leased facility, which includes a building with an area of 23,358 square feet, a spinning production line with 3,000 spindles, bleaching machines and other equipment, will increase the Company's annual capacity by approximately 620 tons of linen yarn, or 39%, and 2.1 million meters of linen fabric, or about 26%, which, over the next twelve months, is expected to add approximately

$4.9 million in revenue,
$1.5 million in gross profit and
$1.2 million in net income .

The bleaching factory, with annual capacity to bleach 10 million meters of linen fabric, is expected to generate approximately

$1.5 million in additional net income over the next twelve months.

China Linen has commenced operation at the leased facility and expects to generate approximately $1.4 million in net income in the second half of 2010 from its new facility.

"We are pleased to sign this lease agreement which enables us to address our short-term capacity constraints while providing an option to acquire the facility," stated Mr. Gao Ren, chairman and president of China Linen. "We have seen an increase in demand from domestic and international customers this year, and this lease agreement enables us to fulfill more of those orders and improve our 2010 financial performance. In addition, we believe the bleaching facility will add a downstream vertical component to our value chain and further increase our gross margin. We plan to pursue more orders with the goal of full utilization of the leased facility and increasing our profit further for 2010 and 2011."

GeoBargain Notes

Mon, 14 Dec 2009 05:00:00 GMT

GeoNuggets® - Quick Check List Highlighting Undiscovered Opportunities

China Linen Textile (OTC BB:CTXIF)

Coded as a GeoBargain on December 1, 2009 at $1.25.

Company Description: China Linen Textile is principally engaged in the production and sale of linen yarn and various types of linen fabric.

Data Ended 12/15/09

Price = $1.10
Trailing EPS = $0.23
2010 EPS Guidance = $0.39
Trailing P/E= 4.78
Forward P/E= $2.82

Reasons for Optimism

CTXIF meets 9 out of 10 GeoBargain® Requirements

	Requirement	Comments
	Recent 52-week High (generally within 3 months)	Reached $1.89 on 11/16/09
	30% EPS Growth Rate^a	Nine Months 2009 EPS increased 31.3%
	10% Revenue Growth	Nine Months 2009 revenue increased 14.7%.
	Strong Balance Sheet/Cash Flow	As of 3rd Qtr 2009
No	Debt to Equity Ratio less than 20%	20.3% Short-Term Debt to Equity
No	Current Ratio is at least 2:1	1.64:1
Yes	Positive Cash Flow	$2.3 Million as of 3rd Qtr. 2009
	Return on Equity is at least 15%	>15%
	Minimum Pre-tax Operating Margins of 8%	27.6% as of 3rd Qtr. 2009
	Preferably Under 50 Million Shares	20.1 Million shares as of 3rd Qtr. 2009
	High Insider Ownership (generally greater than 15%)	90%
	Limited Institutional Ownership (generally less than 20%)	<20%
	P/E Divided by Growth Rate (PEG Ratio) is Less Than 1.	0.15

China Linen has exhibited consistent growth

	2004	2005	2006	2007	2008
Revenues	$8.4 M	$13.2 M	$14.5 M	$20.8 M	$22.9 M
Income from Operations	$549 T	$982 T	$3.5 M	$4.4 M	$4.0 M
Net Income	$364 T	$834 T	$2.7 M	$3.4 M	$3.7 M
Total Assets	$15.4 M	$17.5 M	$26.4 M	$31.5 M	$36.2 M
Total Current Liabilities	$13.0 M	$14.0 M	$18.9 M	$18.7 M	$18.2 M
Net Current Assets	$2.4 M	$3.5 M	$612 T	$3.5 M	$6.2 M
Stockholder Equity	$2.4 M	$3.5 M	$6.9 M	$11.1 M	$15.6 M

Although operating earnings were down, China Linen was still able to increase sales in a challenged economy while maintaining profitability. This is due to the company's high margin emphasis.

There is room for growth domestically. As the Chinese consumer standard of living improves so to will the demand for higher quality linen. Thus, China Linen's plans to increase domestic penetration. This strategic move allows the company to target a growing niche segment in a mature market. The company also has significant opportunities to grow via greater province coverage. Currently, China Linen covers 11 provinces, up from 9 provinces in 2008. In 2010, the company hopes to have market presence in 15 provinces.
Acceleration of growth due to greater involvement in the linen industry chain.
"The linen industry chain involves a 5-step process including (i) raw material planting; (ii) fiber production; (iii) yarn spinning; (iv) fabric weaving and (v) dyeing and finishing. The company’s current operations are focused on only two of the steps in this process, yarn spinning and fabric weaving. In the future, the company plans to expand its operations to include other aspects of the industry chain including particularly dyeing and finishing."

In our conversation with company management, they indicated that higher profit margins are the impetus for targeting the dyeing and finishing segments of the industry chain. The goal to cover the enitre industry chain may afford China Linen many years of growth. Margin and sales may also improve as it gains a competitive advantage through quicker customer delivery with a broader high quality product offering
The company has issued 2010 EPS guidance of $0.39 giving it a meager forward P/E of 2.82. The stock is also selling near its book value per share of $0.99. (Please note that the company's guidance is predicated upon the completion of a financing transaction. Normally we would wait for the financing to occur before coding as a GeoBargain. But the low relative valuation combined with confidence that the market will afford CTXIF a funding opportunity has prompted us to step outside the box.)

Note:

We are still awaiting management's response to a few questions including why operating cash flow was down from 2008 and if the company has any plans on paying down $4 million in short term debt.

Potential Valuation Scenarios if the company can achieve its EPS growth goals:

**Short-Term Potential value based on trailing EPS

P/E 15 * $0.23 = $3.45
P/E 20 * $0.23= $4.60

**Short-term Potential value based on 2009 EPS Guidance

P/E 10 * $0.39 = $3.90
P/E 15 * $0.39 = $5.85

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Financials

Tue, 24 Nov 2009 05:00:00 GMT

	2004	2005	2006	2007	2008
Revenues	$8.4 M	$13.2 M	$14.5 M	$20.8 M	$22.9 M
Income from Operations	$549 T	$982 T	$3.5 M	$4.4 M	$4.0 M
Net Income	$364 T	$834 T	$2.7 M	$3.4 M	$3.7 M
Total Assets	$15.4 M	$17.5 M	$26.4 M	$31.5 M	$36.2 M
Total Current Liabilities	$13.0 M	$14.0 M	$18.9 M	$18.7 M	$18.2 M
Net Current Assets	$2.4 M	$3.5 M	$612 T	$3.5 M	$6.2 M
Stockholder Equity	$2.4 M	$3.5 M	$6.9 M	$11.1 M	$15.6 M