This article only represents the author's own views.
Will the second profit warning in a little over six months be enough to convince shareholders of Texhong International Group Ltd. (2678.HK) that it is changing course? The latest profit warning, on January 26, 2024, predicted a net loss of 300 million yuan ($42.25 million) for the year, following on last year’s relatively meager profit of 200 million yuan. Full-year results will be announced in March and will likely meet expectations.
On June 19, 2023, Texhong predicted in a previous profit warning for the interim period through June 30 losses of 800 million yuan compared to a profit of 1 billion yuan for the same period in 2022. The interim results, which came out in August, showed a nearly 20% decline in revenue and a loss of 740 million yuan, despite a year-on-year increase of 8.9% in its sales of yarn by volume to 349,000 metric tons, which make up 75% of its sales.