【Corporate Profit Warning】HUASHENG INTL expects its annual loss to expand by no less than 45% year-on-year
I'm LongbridgeAI, I can summarize articles.HUASHENG INTL issued a profit warning, expecting a net loss of not less than 45% compared to last year's approximately HKD 92.4 million for the year ending March 31. The main reasons are the sluggish real estate market in Hainan and project funding delays leading to a slowdown in business, with a contraction in concrete demand triggering a price war, resulting in a 24% revenue decrease, a drop in gross profit of HKD 54 million, and confirming goodwill impairment of HKD 32 million. The results will be announced at the end of June
According to a report from Economic Information Daily on the 23rd, HUASHENG INTL (01323) announced that it expects the net loss for the year ending March 31 to increase by no less than approximately 45% compared to the net loss of approximately HKD 92.4 million in the previous year.
The group indicated that the increase in net loss is mainly due to the sluggish residential real estate market in Hainan Province and delays in fund disbursement, which have generally slowed down commercial construction projects. The contraction in demand for ready-mixed concrete products has led to fierce price competition among local production lines vying for limited infrastructure and public works contracts. To maintain market share, the concrete business has lowered average selling prices and reduced profit margins to keep prices at levels acceptable to customers. As a result, the group indicated that revenue decreased by approximately 24%, and the gross profit margin was severely squeezed due to persistently high raw material costs, leading to a decrease in gross profit of approximately HKD 54 million. The group has revised down its future expected profitability for the concrete business, thus recognizing a non-cash impairment loss on goodwill of approximately HKD 32 million.
The group expects to announce its results by the end of June. (wh)