Tianchang Group Expects Profit down by 60% Due to E-cigarette Sales
Recently, Tianchang Group (02182.HK) announced that the group is expected to see a decrease of at least 30% in revenue for the year ending December 31, 2023 compared to the year ending December 31, 2022, with a reduction of 1.1439 billion Hong Kong dollars. Additionally, the group is expected to see a decrease of at least 60% in net profit for the year ending December 31, 2023 compared to the year ending December 31, 2022, with a reduction of 1.059 billion Hong Kong dollars.
The Board of Directors believes that the decrease in expected revenue and net profit is mainly attributable to the decrease in sales of e-cigarette products. As disclosed in the company's announcements dated March 14, 2022, June 14, 2023, and January 12, 2024, the sales orders of e-cigarette products have decreased for this fiscal year following the cancellation of exclusive rights agreements between the e-cigarette products' major customers.
It is reported that Tianchang Group used to provide OEM services for the e-cigarette brand "blu" under Imperial Tobacco. In their semi-annual report in 2023, Tianchang Group mentioned that sales orders for e-cigarette products had decreased during this period due to the cancellation of exclusive rights clauses between the main e-cigarette product customers.
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