WIN HANVERKY (03322) issued a profit warning, expected annual loss after tax of approximately HKD 60 million

WIN HANVERKY (03322) announces that the group expects to incur a post-tax loss of approximately HK$60 million for the year ending December 31, 2024, compared to a post-tax loss of HK$383 million for the year ending December 31, 2023. The group was successful in turning around a post-tax loss of HK$86 million in the first half of this year to a post-tax profit of approximately HK$26 million in the second half of this year. The reduction in the estimated post-tax loss for this year is mainly attributed to an increase in operating profit of approximately HK$198 million in the sportswear production business, resulting in an operating profit of HK$10 million (compared to an operating loss of HK$188 million in 2023). The turnaround from an operating loss to an operating profit is mainly due to a revenue increase of approximately HK$577 million, or 31%, to HK$2.457 billion (compared to HK$1.88 billion in 2023). The increase in revenue is mainly due to customers improving their excessive inventory issues, a rebound in customer orders, and the termination of the "Champion" fashion brand retail business last year resulting in a loss of HK$120 million. The termination of the "Champion" exclusive stores since January 2024 has prevented any losses in the current year. Additionally, the company provided updates on its business operations, which include the production of sportswear and high-performance outdoor clothing. Revenue from the sportswear production business increased by approximately HK$577 million to HK$2.457 billion (compared to HK$1.88 billion in 2023), with a growth rate of 31%. This increase is mainly attributed to customers addressing inventory issues and an increase in customer orders driven by higher consumer demand, especially from large sports events. Overall, this business successfully turned a operating loss of HK$188 million in the previous year into an operating profit of approximately HK$10 million this year. Revenue from the high-performance outdoor clothing production business increased by approximately HK$278 million to HK$864 million (compared to HK$586 million in 2023), with a growth rate of 47%. This growth is primarily due to expanding collaboration with a comprehensive sportswear enterprise group in mainland China, leading to an increase in orders from the Chinese market. This business achieved an operating profit of approximately HK$35 million this year (compared to an operating profit of HK$3 million in 2023).