Shenzhou International's gross sales margin is approximately 22.1% in 2022

In addition, Shenzhou International's gross sales margin is approximately 22.1% in 2022, a decrease of about 2.2 percentage points from 24.3% in 2021. It is said that the main reason for the decline is, on the one hand, the impact of rising prices of production factors such as raw materials and energy. On the other hand, in January and October 2022, due to the impact of the epidemic, the Group's production base in Ningbo was partially suspended for about half a month, which affected effective output, and at the same time, expenditures related to the epidemic also increased. In addition, due to the decline in global demand, the capacity utilization rate in the second half of the year was insufficient, but the Group did not lay off employees or shrink the scale of production capacity.

Shenzhou International also disclosed in the financial report that due to the weak global demand for apparels, major customers are still in the process of destocking. It is expected that the capacity utilization rate in the first half of 2023 will not reach the ideal level, and the operating income will decline compared with the same period in 2022, but in the second half of the year, there will be an overall recovery trend.