According to Zhitong Finance App News, Li Nian International (09918) announced that the Group expects to obtain a net loss of no more than HK$3 million for the year ended 31 December 2023 or no more than HK$3 million in net profit attributable to equity holders of the company, while profit attributable to equity holders of the company was approximately HK$15.1 million for the year ended 31 December 2022.
According to the announcement, the expected decrease in net loss or net profit is mainly due to a large loss in the fair value of financial assets that include profit and loss at fair value; inventory provisions; a significant increase in administrative expenses; and an increase in net financing costs.
The fair value loss of financial assets, which includes profit and loss at fair value, is due to the company recalculating investments in convertible bonds issued by Talentone Technology Limited at market value at the end of the reporting year and making an impairment assessment of inventory in accordance with applicable accounting standards. Since these losses are only depreciation provisions, they have no impact on the Group's cash flow position.
The increase in net financing costs was mainly due to a sharp rise in the Hong Kong interbank interest rate in 2023. The increase in administrative expenses is mainly due to the strategic increase in the number of product innovation and marketing staff in 2023 to obtain future business opportunities.