Jinwu Financial News | Zi Wu Yu (02420) issued a profit warning. Compared with net profit of approximately RMB 111 million for the year ended December 31, 2022, the Group expects to record a net loss of approximately RMB 100 million to approximately RMB 290 million for the year ended December 31, 2023.
Mainly the combined impact of the following events: (i) Increased inventory impairment accruals: During the reporting period, the Group further implemented a brand building model to improve operational efficiency and optimize the inventory structure. During the reporting period, the Group completed the sorting of strategic and advantageous products, concentrated resources on popular products to increase inventory turnover, and cleaned up some inventory with slow turnover, which led to an increase in inventory impairment accrual amounts. According to data currently available to the company, the Group is expected to record inventory impairment charges of approximately RMB 363 million to RMB 413 million during the reporting period; and (ii) an increase in employee benefit expenses: Based on strategic development needs, the Group further broadened its talent structure during the reporting period, increased the introduction of middle- and senior management and information technology personnel, and reserved talents for the Group's future business expansion, leading to an increase in employee welfare expenses.