Huaxin Handbag International Holdings (02683) is expected to account for annual shareholders' net profit of about HK$63 million to HK$67 million

According to the Zhitong Finance App, Huaxin Handbag International Holdings (02683) issued an announcement. It is estimated that the Group will obtain net profit attributable to the company owner of about HK$63 million to HK$67 million in the year ending March 31, 2025, while net profit attributable to company owners is approximately HK$29 million for the year ending March 31, 2024.

Net profit attributable to company owners increased in the reporting year compared to previous years, reflecting continued improvement in market sentiment, rising customer demand, and the effectiveness of cost control measures, and continued until the second half of the reporting year. The main factors are detailed as follows: (i) Revenue increased by approximately HK$130 million from approximately HK$594 million in the previous year to approximately HK$724 million in the reporting year, an increase of approximately 22%. This was mainly due to continuous orders placed by new customers and sales from Europe (particularly the Netherlands) in the reporting year; and (ii) the increase in revenue due to an increase in the number of products sold by the Group, as well as the successful implementation of a number of strict cost control measures and the reduction of the Group's basic production and operation costs, which also led to an increase in gross profit and gross margin.

In summary, gross profit for the reporting year increased compared to previous years. However, the increase was mitigated in part by the following factors: (i) an increase in sales and distribution expenses, mainly due to increased transportation and insurance expenses due to an increase in sales activity levels; (ii) an increase in administrative expenses, mainly due to an increase in employee welfare expenses, in line with an increase in the level of sales activity; (iii) a decrease in exchange gains from the depreciation of RMB against the Hong Kong dollar in the reporting year; and (iv) an increase in income tax expenses due to an increase in taxable profit in the reporting year.