TRAD CHI MED (00570) issues profit warning. Expected net profit for 2024 is forecasted to decrease by 90%-100% year-on-year.

TRAD CHI MED (00570) announced that it is expected to see a decrease of 90%-100% in net profit attributable to shareholders for the year 2024 compared to the previous year, and a decrease of 50%-60% in adjusted net profit for the same period. The Board believes that the decrease in net profit for the current period is mainly due to: (i) multiple factors such as lower prices in collective procurement, intensified market competition, and high raw material costs affecting the sales volume and profitability of the traditional Chinese medicine granule business; (ii) an increase in provision for impairment of goodwill, impairment of intangible assets, and impairment of fixed assets in this period; and (iii) the payment of outstanding taxes by some subsidiary companies having a significant impact on the net profit of the Group for this period. Adjusted net profit is the net profit after deducting the following impacts: (i) provision for impairment of goodwill and fixed assets based on the operating conditions of the current period; and (ii) the payment of outstanding taxes by some subsidiary companies.