The gross profit margin of Cosmo Lady, one of the largest intimate wear enterprises in China, increased 26.2 percent year-on-year in 2020, according to the company's annual financial report.

"The increase was primarily due to continued implementation of a transformation plan for improvement of supply chain management, product operating and merchandising capabilities to lower cost and improve gross profit margin," said Sui Ka Lok, chief executive officer of Cosmo Lady.

Drops in the cost of raw materials and sales of aged inventories, with full provisions already made at a large discount to overseas markets in 2020 were also reasons for the company's gross profit margin increase, according to Sui.

"Affected adversely by the global trade disputes and the outbreak of the COVID-19, the first half of 2020 was exceptionally tough for the retail industry," Sui said.

Additionally, there had been keen competition in China's intimate wear market, which continued to undergo structural adjustments in sales channel diversification, product quality and mix of products.

"A series of measures, including stepping up efforts on clearing aged inventories, developing online new retail and launching new competitive products, helped us maintain business growth," Sui added.

According to the company's annual report, Cosmo Lady's sales revenue reached 3.057 billion yuan ($470 million) in 2020, with its gross profit margin increasing to 48.8 percent.

The Hong Kong-listed company expects to maintain a sales increase in 2021.

"We have shifted our focus from selling aged inventories to producing new products tailored for consumers, which is more practical, functional, comfortable, healthy and higher value-for-money," Sui said.

In a recent order meeting for spring and summer products held in Shenzhen, Guangdong province on March 28, orders from the company's retail partners increased more than 30 percent year-on-year.