Haojiang Electromechanical (01408) issued a profit warning and is expected to make a net loss for the year

Zhitong Finance ·  Feb 23 03:55

According to the Zhitong Finance App, Haojiang Electromechanical (01408) announced that the Group's net loss for the year ended December 31, 2023 will not be higher than the net loss achieved in the six months ended June 30, 2023, or approximately MOP 5.4 million. For the year ended 31 December 2022, the Group achieved net profit of approximately MOP 9.3 million.

According to the announcement, the expected loss is mainly due to the decline in overall gross margin and the following factors: compared with the year ended December 31, 2022, the number of successful projects has decreased and gross margin has narrowed drastically; due to the economic recession, group customers have stricter cost control, making it increasingly difficult to negotiate and bargain on additional matters, and the fee price for additional matters has decreased, leading to a decline in gross margin this year; the slow recovery of the Macau Electromechanical (Mechatronics) engineering market this year, especially project tenders in the entertainment and resort industry and the public sector, led to Macau Electromechanical Engineering Demand for services is weak; and due to the above factors, revenue from some low gross margin projects is insufficient to cover all of the Group's related fixed costs and salaries. However, the Group remains committed to social responsibility, and in order to maintain its competitiveness and capabilities, the Group maintained its current workforce during the year without any layoffs.

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