On July 18th, Gelunhui reported that H&H International Holdings (01112.HK) had a low to medium single-digit decline in total revenue compared to the same period last year as of June 30, 2024, based on reporting and similar benchmarking. This decline was mainly due to a decrease in sales of infant formula after transitioning to the new "national standard approved" infant formula series. This decline was partially offset by low double-digit revenue growth in the group's adult nutrition and care product division and stable unit revenue growth in its pet nutrition and care product division.
As of June 30, 2024, the group's adjusted comparable EBITDA is expected to decline by 10% to 20% from the same period last year. The group's adjusted comparable EBITDA rate for the six months ending June 30, 2024 is expected to maintain a stable level of high double digits.
The group's adjusted comparable net profit for the six months ending June 30, 2024 is expected to decline by 30% to 40% from the same period last year. As for the reported net profit of the group reported in accordance with the International Financial Reporting Standards, it is expected to reflect a decline of 45% to 55%. The reduction in the group's reported net profit is mainly due to the following adverse effects: (i) double-digit decline in sales of infant nutrition and care products; (ii) one-time reorganization costs incurred by the high-end product mix and channel optimization work of the Solid Gold business in the North American market; and (iii) the increase in financing costs caused by the Federal Reserve's interest rate hike, the increase in the coupon interest cost of new US dollar bonds, and the depreciation of the RMB against the US dollar.