Baiyue Group (08545.HK) issues profit warning, expecting annual net loss attributable to shareholders of not less than HK$2 million.

Finance Channel App News, Bayue Group (08545.HK) announced that the group is expected to incur a loss of not less than 2 million Hong Kong dollars for the current fiscal year that the company's owners are responsible for, while in the previous fiscal year ending on March 31, 2024, a profit of approximately 490,000 Hong Kong dollars was achieved. According to the information obtained immediately before the publication of this announcement, the Board of Directors believes that the main reason for the change from profit to loss in the current fiscal year is a decrease in revenue of about 34.7%. The decrease in revenue is mainly due to significant declines in all divisions of the toy business. It is worth noting that sales of ODM toys to franchisees and sales of proprietary toys and related products decreased by 46.5% and 40.4% respectively. The significant decrease in sales revenue is due to economic pressures, including inflation and consumers reducing spending on non-essential items. The change from profit to loss in the current fiscal year is also mainly due to an impairment loss of 4.5 million Hong Kong dollars in the equity of a joint venture company obtained by the group, due to the operational challenges faced by the joint venture company due to economic downturn, increasing competition, and operational difficulties.