Qingmei Group Holdings has narrowed its fourth quarter net loss to 22.1 million yuan from 40.8 million (S$4.6 million) in the same period last year.

Revenue for the three months to June 30 slumped by 47.9 per cent to 35.9 million yuan.

This was due mainly to the decrease of 35.1 per cent in sales volume from 3.7 million pairs of shoe soles to 2.4 million pairs.

The drop in sale orders was due to the following reasons:

* the continued slowdown in domestic market demand for products due to the intensified competition and consolidation downstream business;

* the temporary stoppage of certain production lines for repair works in the second half of the financial year; and

* the cyclical issue of excessive channel inventory for the downstream business.

Loss per share improved to 3.2 fen from six fen previously while net asset value per share eased by 16 fen to 1.46 yuan.

For the full year, Qingmei reported a net loss of 117.6 million yuan against profit of 133.2 million yuan previously.

Revenue slumped by 82 per cent to 164.6 million yuan.

Despite selling its shoe soles at a loss, Qingmei's management believes that the group needs to maintain its manufacturing operation, to meet market demand and to maintain long term customer relationships.