Tebu'S First Half Profit Warning: Net Profit Decreased By 45% To 55% Year On Year

Focus! Recently, TEB International released a profit warning for the first half of 2020 and the operation of mainland business in the second quarter. It is estimated that for the six months ending June 30, 2020, the share of common equity holders in the company's unaudited consolidated profits recorded in the same period in 2019 will be reduced by about 45% to 55%.

As for the loss of this profit, Tebu said that it was mainly due to the number of medium-sized units and a decrease of 25-30% in the revenue and segment profit of the main brands of Tebu. Due to the outbreak of a new type of coronavirus disease in the mainland of China in late January this year and the subsequent prevention and control measures taken by the government, the operation of factories and shops was generally hindered, resulting in the reduction of orders and replenishment orders of agents.

Through a variety of subsidies to strengthen the support for the agents of the main brand of Tebu; and since mid March, most of the business operations of the newly acquired brands gasway and paladin in America and Europe have been suspended due to the impact of the covid-19 epidemic.

It is worth mentioning that as of June 30, 2020, the net cash and cash equivalent items (including time deposits, structured bank deposits and mortgaged deposits less bank borrowings) of the special step project are about RMB 2.1 billion. Retail sales have improved from the first quarter of 2020.

Such good results are mainly due to the effective measures taken by the company in the first half of the year and the epidemic prevention measures of the Chinese government. In the first half of the year, the company actively expanded its sales to e-commerce platform and implemented various cost control measures to alleviate the impact of the epidemic; the Chinese government strictly controlled the epidemic situation, launched stimulus policies to promote the economy and enhance market confidence, thus achieving good results.

According to the data, Tebu was founded in 1987, which is one of the leading sporting goods in China. In 2001, Tebu brand was founded and officially listed on June 3, 2008. It is mainly engaged in the design, research and development, manufacturing, sales, marketing and brand management of sports shoes, clothing and accessories.

In addition, the performance of the business in mainland China depends on the effectiveness of the prevention and control measures taken by the Chinese government. Therefore, the group will maintain a cautious and optimistic attitude towards its business recovery until the second half of this year.

It has to be noted that the performance of Tebu in 2019 is very impressive, breaking the record in the past five years. In 2019, Tebu achieved revenue of 8.183 billion yuan, a year-on-year increase of 28%, and a net profit of 728 million yuan, a year-on-year increase of 11%.

The impact of the epidemic in 2020 is huge, and all major brands are affected, and Tebu brand is no exception. Although Tebu was hit during the outbreak, its performance before the outbreak was very impressive. Boil the present bitter, after the sweet is not far from you, please believe that the road ahead is a bright.