• Q2 profit jumps 47.8% to CNY13.3m 
  • Revenue falls 9.5% to CNY201.7m 
  • Gross margin slips to 27%

Men's wear business China Xiniya Fashion has booked a better-than-expected increase in second-quarter profit, despite a drop in revenues.

Net profit reached CNY13.3m (US$2.2m) for the three months to 30 June, compared to CNY9m in the same period of the prior year.

Meanwhile, revenue fell 9.5% to CNY201.7m from CNY222.9m last year. The company said this as slightly better than its prior guidance of a 10-15% decline.

Gross margin slipped to 27% against 28.5% a year ago, primarily due to increased expenses associated with the research and development of the company's latest collection to improve its competitiveness and fashion appeal.

"The ongoing downturn in China's menswear industry and intense competition continued to impact our financial results during the quarter," said Xiniya chairman and CEO Qiming Xu.

But, he later added: "While we don't expect to see the market improve in the short-run, we are actively working on implementing a strategy to adjust our business model to this new market environment in order to ensure the long-term sustainability of our business and brand."