LONDON (Alliance News) - Jiasen International Holdings Ltd on Monday said revenue fell below expectations in the first nine months of 2015, as a result of a slowdown in China's economic growth and weaker consumer confidence and demand.
The property fit-out business, which manufactures wooden products for residential and commercial properties, said sales slowed in the nine months to September 30 during a difficult trading environment which saw reduced demand for high-end refined housing decoration, or semi-furnished homes.
In the nine months, revenue fell by 17% to CNY543.4 million from CNY652.8 million in the same period the year before, which was below the company's expectations.
Wholesale distribution revenue, however, grew by a quarter as a result of new outlets opened during the period, while gross profit margin was maintained within its expected range of 27% to 30%, at 27.4%.
Jiasen added that due to the slowdown in housing sales, it has agreed with a property developer to amend the repayment terms of the outstanding part of their contract. The contract, valued at CNY170.4 million, was for two projects of which CNY66.9 million has been received to date. Of the CNY104.6 million outstanding, Jiasen has agreed with the debtor that it will pay a further CNY15 million in February with the balance paid as properties are sold.
"Since the half-year end, trading has been more challenging driven by wider macroeconomic conditions and sentiment which has impacted revenues and overall profitability. We expect this trading environment to remain, and will continue to take mitigating steps to ensure the business remains insulated during this challenging environment, and well positioned to grow revenues again when favourable conditions return," Chairman Weigang Chen said in a statement.
Shares in Jiasen were trading down 30% at 3.50 pence on Monday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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