Yongjia Group Holdings Co., Ltd. (hereinafter referred to as “Yongjia Group”) recently issued an announcement showing that the company expects to record an after-tax loss of approximately HK$70 million for the year ending December 31, 2021, while achieving an after-tax loss in 2020 HK$189 million. The decrease in losses is mainly due to the fact that the Group withdrew and ceased operating the e.dye business last year, so there was no loss arising from the discontinued business – e.dye business this year (2020: loss of HK$105 million).
Yongjia Group explained that although the epidemic continued to cause an extremely severe and unpredictable operating environment, the company’s revenue from continuing operations still achieved an increase of approximately HK$116 million, or 3%, to HK$4.137 billion, while gross profit increased by approximately HK$20 million. or 2% to HK$985 million. The company’s production business and high-end fashion retail business can remain stable despite the difficult operating environment.
Previously, Yongjia Group’s factories in Vietnam and Cambodia suspended production from mid-July to early October 2021. The Vietnam factories accounted for 33.6% of the company’s total revenue and 48.5% of the company’s production business revenue last year. The company’s Vietnam and Cambodia factories The temporary suspension of production will result in a total operating loss of approximately HK$116 million in 2021. After going through a difficult period of suspended operations, the production capacity of Vietnam’s factories has returned to normal in November 2021. Yongjia Group’s long-term and solid relationships with existing internationally renowned customers have helped it face the complex and ever-changing environment. Customers have always fulfilled their orders without a large number of cancellations or reductions. In addition, the vaccination situation in various places where Yongjia Group’s production plants are located is satisfactory, which will prevent these countries from implementing further lockdowns.
Public information shows that Yongjia Group is mainly engaged in the production of sportswear and high-end functional outdoor clothing, including sportswear, golf and high-end fashion apparel and related accessories. The company operates businesses in mainland China, Hong Kong, Macau, Taiwan and Singapore. The company operates its business through two business units. The company mainly produces sportswear for international brands such as Adidas, Reebok, Umbro and Diadora.
The financial report shows that in the first half of 2021, the operating income of Yongjia Group’s sportswear production business increased by approximately HK$23 million to HK$2413 million, an increase of 1%. This was mainly due to an increase in the number of orders received from customers, especially the demand in the US market from 2020. Recovering from the obvious decline in 2009, the revenue of the high-end functional outdoor clothing production business increased by approximately HK$124 million to HK$515 million, an increase of 32%. This was mainly due to the successful business development of the high-end functional outdoor clothing production business in the Chinese mainland market, which resulted in significant gains. Domestic customer orders have increased; in the first half of 2021, the operating income of Yongjia Group’s high-end fashion retail business decreased by approximately HK$31 million to HK$1209 million, a decrease of 3%.
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