Heng Tai (00197) announced six and interim results for the year ended December 31, 2023, with revenue of approximately $242 million...
According to the Zhitong Finance App, Heng Tai (00197) announced six and interim results as of December 31, 2023, with revenue of approximately HK$242 million, a year-on-year decrease of 1.19%; net loss of HK$42.83 million, a year-on-year narrowing of 21.28%; and a basic loss of HK$40.8 per share.
According to the announcement, the slight decrease in revenue was mainly due to a drop in revenue from the trade business of imported products (including imported FMCG and agricultural products), but was greatly offset by an increase in revenue from the domestic fresh agricultural products trade business and upstream farming business.
Compared with the same period last year, gross margin increased from about 6.8% to about 8.1%. The increase in gross margin was mainly due to improved product portfolios and improved operational efficiency at the new food processing center in Dongguan. The processing center located in Dongguan increases operating capacity and reduces transportation costs, thereby effectively improving operating conditions and greatly increasing the gross profit margin of the agricultural products trade business. Furthermore, the group continues to search for more specialty products suitable for the Chinese market to improve its product portfolio, which also increases the gross profit margin of the FMCG trade business. Although competition with domestic brands is fierce, especially in the current economic environment, where domestic brand advertisements are rampant and pricing strategies are aggressive, the group adopted a stable pricing strategy and did not participate in price wars to maintain a stable and healthy gross profit margin during this period.
The decrease in net loss was mainly due to a 1.3% increase in gross margin, a decrease of about HK$3 million in fair value changes due to biotransformation, a decrease of about 7.2% in administrative expenses, and a decrease of about HK$8.7 million in other operating expenses, which were partially offset by a decrease of about 1.2% in turnover, a decrease of about HK$800,000 in other income and revenue, and an increase of about 28.8% in sales and distribution expenses.