Shoe industry giant Jiuxing Holdings released its financial report: Unaudited preliminary performance expectations for the full year as of December 31, 2020. Net profit for the year is expected to be between US$0 and US$5 million, which is higher than the previous financial year. The annual revenue of $95.9 million decreased by 95%.
On January 14, shoe giant Jiuxing Holdings released its financial report:
As of December 31, 2020 The unaudited preliminary performance forecast for the year is expected to be between US$0 and US$5 million in net profit for the year, a 95% decrease from US$95.9 million in the previous fiscal year.
Jixing Holdings stated that the main reason for the decline in profitability was that customers delayed or canceled orders and shipments due to the global epidemic.
As a result, shipments for the full year ended December 31, 2020 declined significantly, resulting in higher one-time charges due to the following reasons:
As the Group accelerated the migration of production capacity to plans in Southeast Asia, severance costs arising from the permanent closure of its mainland China factories and related impairments in property, plant and equipment, and the temporary reduction in the scale of the group’s operations in Southeast Asia due to a decline in orders due to public health incidents In order to improve cost efficiency and to comply with measures adopted by local governments in mainland China, the Philippines and Bangladesh, local factories are required to temporarily suspend production and related indirect costs.
At the same time, the lower utilization rate of the group’s production facilities due to reduced orders has led to an operational deleveraging effect.
As of Thursday’s close, Jiuxing Holdings’ share price fell 2.65% to HK$9.17, with a market value of approximately HK$7.3 billion.
In the fourth quarter of 2020, the group’s order volume for the three months ended December 31, 2020 decreased by 21.7% year-on-year.
This is the second consecutive quarter that the group’s year-on-year quarterly shipment decline continued to narrow compared with the previous quarter, as customers’ businesses began to recover, some of which were running out of inventory before the holiday season. Inventory levels must be replenished.
For the three months ended December 31, 2020, the group’s unaudited comprehensive income decreased by 18.9% to approximately US$280.1 million (the same period in 2019: US$345.4 million); as of December 31, 2020 For the full year ended, the group’s unaudited comprehensive income decreased by 26.5% to US$1.1358 billion (the same period in 2019: US$1.5448 billion). </p
