FAST NEWS: Linklogis falls into the red as customers struggle

The latest: Supply chain financing solutions provider Linklogis Inc. (9959.HK) announced last Friday it expects to record a net loss between 165 million yuan ($22.7 million) and 175 million yuan in the first half of this year, reversing a 43 million yuan profit in the same period of 2022.

Looking up: Despite suffering by some of its customers in the first half of the year, the company believes demand for supply chain financing services still has great potential, and thus it remains focused on swiftly expanding its market share and acquiring new customers.

Take Note: Linklogis expects its revenue to decrease by approximately 23% year-on-year during the period, blaming changes in its customers and their product structures. The company has also adopted a more flexible pricing and sales strategy in response to the evolving macro environment, resulting in a lower gross margin.

Digging Deeper: Founded in 2016, Linklogis has become a leading supplier of supply chain financing technology and listed on the Hong Kong Stock Exchange in April 2021. It helps other companies automate their supply chain financing processes, often using large enterprises’ credit to enable their suppliers to get low-cost financing by providing their accounts receivables at a discount to lenders. The company has yet to make an annual profit since its inception, though last year’s net loss narrowed by more than 99% year-on-year to 13.46 million yuan, marking its best annual performance.

Market Reaction: Linklogis shares plunged on Monday to close down 19.7% at HK$2.04 by the midday break, hitting a historic low since its IPO.

Translation by A. Au

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