Herbs Generation faces lower profit

Health supplement supplier Herbs Generation (2593) has issued a profit warning less than three months after its highly anticipated Hong Kong listing, blaming listing expenses as a primary reason for the lower profit.

The company, co-founded by local actor Roger Kwok Chun-on and his sister Gammy Kwok Chi-yan, expects its 2024 profit to range between HK$11 million and HK$13 million, a drop of up to 72 percent from the HK$39.5 million profit a year earlier.

It cited listing expenses of around HK$19 million in December last year as a key factor, noting the cost accounted for over 10 percent of the HK$125 million raised in its initial public offering.

Other reasons include higher depreciation expenses due to newly opened self-operated stores, as well as a decline in wholesale sales, which weighed on total revenue and gross profit, it said.

Herbs Generation's retail tranche was 6,083 times oversubscribed, the highest on record after Most Kwai Chung's (1716) which was 6,288 times oversubscribed in 2018.

Its shares fell 1.6 percent to HK$1.85, yesterday following the warning and are now down 51 percent since its debut.

Staff reporter