On March 22, Gelonghui | Jiachen Holdings (01937.HK) announced that compared to the Group's net profit of about RMB 10.7 million in 2022, the net profit attributable to company owners in 2023 is expected to be reduced by no less than 40%.
The board of directors believes that the reduction in net profit attributable to company owners in 2023 is mainly due to (i) an increase of not less than 30% and not less than 10% in sales expenses and administrative expenses of approximately RMB 7.2 million and RMB 20.4 million respectively in 2022. Group management believes that in order to cope with the Group's revenue growth in 2023 and the Group's expected revenue growth in the future, the increase in expenses is unavoidable; and (ii) the impairment of contract assets and trade receivables and notes receivable, an increase of not less than 50% over the 2022 provision of approximately RMB 5 million. This is determined based on past credit loss experience and adjusted for forward-looking estimates.