Shang Gong Group (600843.SH) announces a forecasted net loss of 195 million to 250 million yuan for the year 2024.

Shang Gong Group (600843.SH) announced that it is expected to incur a net loss attributable to the owners of the parent company of 195 million to 250 million yuan in 2024, compared to a profit of 90.7386 million yuan in the same period last year. The main reason for the shift from profit to loss in 2024 is due to operating losses in the European sewing machine business and the newly acquired ICON-related assets business. The company's wholly-owned subsidiary, DUKEPRIMEAH Limited Liability Company in Germany (referred to as "DA Company"), was adversely affected by the downturn in demand from downstream major markets such as European automotive manufacturing and leather processing. Product orders plummeted sharply, especially for the high-margin medium-thick fabric sewing equipment of DA Company, which saw a drastic decrease in orders starting from the second half of 2024, leading to underutilization of production capacity and an increase in manufacturing costs. Orders for medium-thick fabric sewing equipment from the wholly-owned subsidiary Baifu Industrial Systems and Machinery Co., Ltd. and the specialized sewing equipment of its KSL branch also decreased significantly. Overall, the sewing equipment sales revenue of the German subsidiary decreased year-on-year, causing significant losses in the sewing equipment business. The subsidiary that acquired ICON-related assets in July 2024 is currently in a phase of business integration and product production recovery, and is currently operating at a loss due to factors such as previous operational integration and investment in supporting the construction of domestic production bases.