WKK Intl (HOLD) (00532) issued a profit warning, expecting an annual net loss attributable to shareholders of approximately HK$191 million to HK$215 million.

WKK INTL (HOLD)(00532) issued an announcement, expecting a consolidated net loss attributable to equity holders of the Company between HK$191 million to HK$215 million in the year 2024, compared to a net loss of HK$132.8 million in 2023. Based on the available information, this decrease is mainly attributed to the following factors: (1) The Group's trading and distribution subsidiary in Taiwan performed poorly in 2024, as customers reduced orders to cut down on inventory and capital expenditure. As a result, the turnover of this department in 2024 slightly decreased compared to 2023. In contrast, the subsidiary in China performed well in 2024, with an increase in capacity and orders from customers. Therefore, the trading and distribution department is still expected to generate a reasonable operating profit in 2024, albeit lower than in 2023. (2) Although the Group's original product manufacturing department saw a slight increase in turnover in 2024, the operating loss in 2024 increased compared to 2023. This was primarily due to changes in the product mix. Additionally, the manufacturing facility in Mexico did not operate at optimal efficiency in the second half of 2024 as expected. The inefficiency was mainly due to the quality of local labor and the inability to source key components from nearby countries, leading to the need to source from mainland China. (3) The Group continues to be negatively impacted by the global economic downturn and the current unfavorable trade and geopolitical tensions. The high interest rates in 2024 have maintained the Group's financing costs at the same high level as in 2023.