On March 11, Ge Longhui Media (01163.HK) announced that for the year ended December 31, 2023, the Group's net profit forecast recorded a net loss of about RMB 10 million to RMB 12 million, while net profit for the same period in 2022 was approximately RMB 9.1 million.
The Board of Directors believes that the conversion of net profit to net loss is mainly due to: (i) During the reporting period, the Group expanded its team of game development professionals, which led to an increase in R&D expenses during the reporting period. (ii) During the reporting period, the Group accrued full impairment of accounts receivable from a customer that may be irrecoverable, resulting in an increase in asset impairment losses during the reporting period. (iii) Due to the continued downturn in the global economy and weak advertising demand, in order to encourage customers to step up their advertising efforts, the Group gave customers a more favorable price policy, which led to an increase in advertising expenses and a decrease in gross profit during the reporting period.