BRIEF: China Traditional Chinese Medicine’s profit tumbles in 2024

China Traditional Chinese Medicine Holdings Co. Ltd. (0570.HK) on Wednesday warned that it expects to report its profit for all of 2024 fell by 90% to 100%, while its adjusted profit also fell by 50% to 60% year-on-year.

The company’s profit totaled 1.4 billion yuan ($191 million) in 2023, according to its latest annual report, meaning last year’s profit will fall to 140 million yuan or even to nil.

The company blamed the big drop on price cuts required by China’s centralized procurement system, as well as intensifying market competition and relatively high costs of medicinal materials. It added that credit, goodwill and plant impairment costs increased during the period. Its profit was also affected by remedial taxes on some of its subsidiaries last year.

Shares of China Traditional Chinese Medicine fell 6.3% to HK$1.92 in Thursday trading after the profit warning’s release.

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