TAO HEUNG HLDGS issued a profit warning, expecting an annual loss attributable to shareholders of approximately HKD 48 million to HKD 58 million
TAO HEUNG HLDGS expects to record a loss attributable to shareholders of approximately HKD 48 million to HKD 58 million for the fiscal year 2024, compared to a profit of HKD 74 million in the same period last year. The loss is primarily due to a revenue decrease of 10% to 20%, influenced by the global economic slowdown, geopolitical issues, interest rate hikes, and inflation. The Hong Kong dining market faces challenges, including changes in consumer spending patterns and rising costs. Although the mainland dining industry has seen slight growth, competition has intensified. The group will launch a new menu, control costs, and strengthen brand awareness to address market challenges
According to the announcement from TAO HEUNG HLDGS (00573), the group expects to incur a loss attributable to the owners of the parent company of approximately HKD 48 million to HKD 58 million for the fiscal year 2024, compared to a profit of HKD 74 million attributable to the owners of the parent company in the same period last year. This is primarily due to a decrease in the group's revenue of between 10% to 20% for the year ending December 31, 2023.
During this fiscal year, the global economy continued to be affected by factors such as geopolitical turmoil, interest rate hikes, and inflation, leading to a slowdown in economic growth. In the Hong Kong dining market, the overall operating environment remains challenging due to local customers increasingly traveling north for consumption, changes in consumption patterns of mainland Chinese tourists, and rising operating costs. In mainland China, although the restaurant industry's revenue has seen slight year-on-year growth, market competition has become increasingly fierce, with aggressive pricing strategies and customers pursuing extreme value for money, resulting in a situation where revenue increases do not translate into profit growth for the restaurant industry. In response to the challenging market environment, the group has launched more attractive menus, promoted products that cater to market and customer tastes, implemented strict controls on ingredient and operational costs, and effectively utilized technology to enhance product and service quality. Furthermore, the group is committed to strengthening brand awareness through online and offline marketing channels to enhance market competitiveness and promote sustainable business development