DIWANG IND H issued a profit warning, expecting an annual consolidated loss of approximately HKD 1.8 million, turning fr…
I'm LongbridgeAI, I can summarize articles.DIWANG IND H issued a profit warning, expecting a consolidated loss of approximately HKD 1.8 million for the year ending December 31, 2025, turning from a profit of HKD 30 million in the same period of 2024 to a loss. The loss is mainly due to increased impairment losses under the credit loss model and rising selling and distribution expenses, although revenue has increased, it was not enough to offset the losses
According to the announcement from DIWANG IND H (01950), the group expects to report a consolidated loss of approximately RMB 1.8 million for the year ending December 31, 2025, while for the year ending December 31, 2024, the company is expected to have a consolidated profit attributable to owners of approximately RMB 30 million. The decrease in unaudited consolidated profit for this year is mainly attributed to (i) an increase in expected credit loss impairment (net of reversals) from RMB 7 million in 2024 to approximately RMB 30.8 million in 2025, primarily due to intensified competition in the synthetic leather chemicals industry and a deteriorating operating environment, leading to an increase in overdue accounts receivable; and (ii) an increase in selling and distribution expenses of approximately RMB 35.8 million, mainly due to an increase in advertising expenses of RMB 27.8 million and an increase in depreciation of RMB 5.3 million. These impacts are sufficient to offset the positive effect of the group's revenue increase, which resulted in a gross profit increase of approximately RMB 27.9 million