BAWANG GROUP (01338) issues profit warning, expecting significant decrease in net profit for the first 10 months.

The BAWANG GROUP (01338) has announced that compared to the same period in 2023, the management expects a significant decrease in the group's net profit for the first ten months of 2024. During the first ten months of 2024, the group's revenue has slightly increased compared to the same period in 2023, and the gross profit margin has remained relatively stable. This is attributed to the group's efforts to save production costs by using renewable CECEP Solar Energy for the group's production facilities starting in 2024, as well as a reduction in depreciation. However, the group anticipates that the consolidated net profit for the first ten months of 2024 will decrease to approximately RMB 5 million (a decrease of about 64% compared to the same period last year). This is mainly due to an increase in advertising and promotional expenses for the group's products on platforms such as Douyin, JD.com, and traditional distribution channels; an increase in investment in research and development activities; and an increase in general administrative and management expenses, such as employee costs.