According to the Zhitong Finance App, Yingmei (02368) issued an announcement. It is expected that the profit attributable to the Group's owners for the six months ended September 30, 2026 (reporting period) will be drastically reduced by about 40% to 45% compared to the profit of HK$205 million for the same period last year.
According to the data currently available to the Company, the expected sharp reduction in profit is mainly based on the following multiple challenges:
(i) Impact of rising labor and indirect production costs: In line with the Group's long-term cross-regional capacity expansion plan, several new plants have been put into operation as planned since the second quarter of the fiscal year ending March 31, 2026 (previous fiscal year), leading to an increase in the number of employees and wages, plant and equipment depreciation, and other indirect production costs during the reporting period. Production costs have also risen further due to increases in the statutory minimum wage and inflation in various regions;
(ii) Weak demand due to economic uncertainty: in a situation where the global economic downturn and the US tariff policy adversely affected consumer sentiment and weakened the consumer market, the Group's brand customers adopted a more conservative and prudent bargaining attitude on sales prices proposed to the Group during the reporting period, causing the Group's sales to drop by about 3.0% compared to the same period last year;
(iii) The impact of disruptions in production schedules due to US tariffs: The tariff policy implemented by the US government since the first quarter of the previous fiscal year had a profound impact and continued to adversely affect the Group's supply and production chain. During the reporting period, the impact became more obvious, causing the Group's production schedules to be disrupted at various production sites in mainland China and Southeast Asian countries, thereby increasing distribution and production costs; and
(iv) Impact of RMB appreciation against HKD: During the reporting period, the average monthly exchange rate of RMB to HKD appreciated by about 5% to 7% compared with the same period last year. The rapid appreciation of RMB during the reporting period adversely affected the operating costs of the Group's factories in mainland China and the revaluation of the Group's current liabilities denominated in RMB.