Man Wah sits easy even as revenue slips

Man Wah (1999) said net profit rose 10.52 percent to HK$1.09 billion for the six-month period ended September and raised its interim dividend by 15.4 percent to 15 HK cents.

The Hong Kong-headquartered sofamaker attributed the increase in net profit mainly to declining costs for materials and offshore transportation.

However, revenue fell 7.96 percent year on year to HK$9.53 billion in the first half of its current financial year, while the gross profit margin crawled up 2.6 percentage points to 38.8 percent.

Revenue at its principal business in China, which accounts for over 60 percent of the total, dropped 10.7 percent to HK$5.71 billion, with Man Wah citing a weaker yuan and repeated lockdowns.

Sofas and ancillary products, contributing 70.3 percent of total turnover, saw a 5 percent fall to HK$6.71 billion within one year.

Raw material costs went down 15.4 percent to HK$4.48 billion, while offshore transportation and port charges plunged about 30.1 percent to HK$498.63 million.

On its Double 11 online shopping gala this year, sales were flat in comparison to last year as a higher rate of goods returned wiped out a 20 percent growth in orders.

Chairman Wong Man-li said the company will remain cautious in China, as the property market might continue to be sluggish despite a raft of policy support moves.

With less demand for new homes in the tier one and two cities, he said it would focus more on tier three to five cities.

Further, Man Wah might open more new stores if the economy improves, as Beijing has eased its Covid restrictions.

It will put more effort into expanding overseas into Europe and southeast Asia.