Gelonghui, March 21丨Yongjia Group (03322.HK) announced its results for the full year of 2023. Revenue from continuing operations decreased by 24.7% to HK$3,074 billion, mainly due to inventory backlog due to falling consumer demand in various markets (especially in the sportswear market), which led to a decrease in customer orders received by the production business since the last quarter of 2022. Overall, the loss during the year was HK$382.6 million (2022: profit of HK$23.6 million). Excluding discontinued operations, the annual loss from continuing operations was HK$262.5 million (2022: profit of HK$81.2 million).
Gross profit from continuing operations decreased by 38.7% to HK$504 million; gross margin fell 3.7 percentage points to 16.4%, due to (i) a sharp decrease in customer orders received by the production business, leading to a decline in capacity utilization and operating efficiency; and (ii) although all COVID-19-related control measures in the mainland China market have been lifted, the recovery in customer demand in the haute couture retail business was not as strong as expected, so large discounts were needed to stimulate customer consumption.