Limited product diversity and lack of pricing power. Substantial exposure to fluctuations in cotton prices. Leading position in a niche market. Good revenue growth prospect. Volatile profit margin and cash flow. High capital spending on capacity expansion. Good operating cash inflow. Adequate liquidity. The stable outlook reflects our expectation that Texhong Textile Group Ltd.'s new capacity in Xinjiang and Vietnam will drive strong sales volume growth over the next 12 months. We also expect the company to maintain its debt-to-EBITDA ratio at 2x-3x and sufficient liquidity to fulfill financial obligations even in a hypothetical stress scenario for Vietnam, given the company's good operating efficiency and financial discipline. We could lower the rating if Texhong's debt-funded investment in Xinjiang project or
