FAST NEWS: E-commerce trader Zubuyu’s profit plunges on higher expenses

The latest: Cross-border e-commerce trader Zibuyu Group Ltd. (2420.HK) said Tuesday it expects to report a net profit of 9.2 million yuan ($1.29 million) to 12.3 million yuan for the first half of 2023, down 80% to 85% from 61.3 million yuan in the year-ago period.

Looking up: The company further expanded its talent base in the first half of the year, including the addition of information technology (IT) personnel and talent for future business expansion to meet its strategic development needs.

Take Note: The company blamed the falling profit on higher provisions for losses related to inventory write-downs, higher product return rates, and higher costs for warehousing and employee benefits.

Digging Deeper: Founded in 2011, Zibuyu started as a seller of women’s clothing on Alibaba’s (BABA.US; 9988.HK) popular Tmall online marketplace. It shifted its focus to cross-border e-commerce in 2014, targeting buyers in Europe and America, mostly using third-party e-commerce platforms such as Amazon (AMZN.US), Wish and eBay (EBAY.US). Since then it has grown into one of China’s largest cross-border e-commerce companies. It applied to list in Hong Kong as early as June 2021, and finally passed its hearing last year before making its trading debut in October.

Market Reaction: Zibuyu’s shares were unchanged on Wednesday, closing at HK$2.92. The stock has lost 62.8% of its value from its IPO price of HK$7.86 ten months ago.

Translation by A. Au

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