Gelonghui November 22|Virginie (02199.HK) issued an announcement. It is expected that the Group will record a 60% to 70% decrease in net profit for the six months ending September 30, 2023, compared with the same period in 2022. The decline in net profit was mainly due to: (i) a decline in sales due to the overall global economic recession and the Group's client brands entering a de-inventory cycle from the second half of the previous fiscal year, leading to operational deleveraging and a decline in production capacity; (ii) restructuring costs arising from the relocation of production bases in China to optimize production layout; and (iii) rising financial costs due to rising global interest rates.
Despite the above, after a year of industry challenges and the Group's proactive response, the Group's financial performance has gradually recovered since the first half of this fiscal year. Compared with the second half of the previous fiscal year, the Group's sales have resumed steady growth in the current period, and it is expected that net profit will record an increase of no less than 45%.