"Profit Warning" HUAJIN INTL revenue declines, estimated mid-term results turn from profit to loss

HUAJIN INTL (02738.HK) issued a profit warning, expecting a loss of between RMB 490 million and RMB 530 million for the six months ending in June, compared to a profit of RMB 16.9 million in the same period last year. Revenue is expected to be between RMB 720 million and RMB 780 million, a decrease of 75.7%-77.5%.

In the first half of the year, weak market demand and intensified competition led to a continuous compression of product gross margins, with revenue and profits declining simultaneously; the impact of the trade environment and tariff policies resulted in increased sales costs; the instability of the international trade war exerted upward pressure on raw material costs; and low capacity utilization led to an increase in unit processing costs