ShangGong Group issues a profit warning, expecting a net loss of 195 million to 250 million yuan for the fiscal year 2024
I'm LongbridgeAI, I can summarize articles.ShangGong Group expects a net loss of RMB 195 million to RMB 250 million for the year 2024, compared to a loss of RMB 90.7386 million in the same period last year. The loss is mainly attributed to operational losses from the European sewing machine business and the newly acquired ICON-related asset business. The wholly-owned subsidiary DA in Germany has seen a sharp decline in orders due to the sluggish demand in European automotive manufacturing and leather processing, resulting in a decrease in orders for high-margin sewing equipment, insufficient capacity utilization, and rising manufacturing costs. Subsidiaries related to ICON's assets are also in a loss state due to business integration and the production recovery period
According to the announcement from ShangGong Group (600843.SH), it is expected to incur a net loss attributable to the parent company of between 195 million yuan and 250 million yuan for the year 2024, compared to a profit of 90.7386 million yuan in the same period last year. The main reason for the company's shift from profit to loss in 2024 is due to operational losses from its European sewing machine business and the newly acquired ICON-related asset business.
The company's wholly-owned subsidiary in Germany, DA Company, is significantly affected by the downturn in demand from the downstream major markets of European automotive manufacturing and leather processing, leading to a sharp decline in product orders. Starting from the second half of 2024, orders for DA Company's high-margin medium and heavy material sewing equipment have drastically decreased, resulting in insufficient capacity utilization and rising manufacturing costs. Orders for medium and heavy material sewing equipment from DA Company's wholly-owned subsidiary, Baifu Industrial Systems and Machinery Co., Ltd., as well as its KSL branch's special sewing equipment, have also significantly decreased, collectively causing a year-on-year decline in sales revenue from sewing equipment and substantial losses in the sewing equipment business.
The subsidiary that acquired ICON-related assets in July 2024 is still in the process of business integration and product production recovery, and is currently operating at a loss due to factors such as initial operational integration and investments in supporting domestic production base construction