① Affected by real estate disposal falling short of expectations, Oriental Group expects a sharp loss of 1 billion to 1.5 billion yuan in 2023 ② Although real estate is dragging down performance, the company's modern agriculture and health food industry achieved certain results. The company's modern agriculture and health food industry achieved loss reduction during the reporting period ③ The new profit point seawater potash project sought by the company is expected to be completed in 2024, and it remains to be seen whether it can “save the situation”
Financial Services Association, January 30 (Reporters Liu Jian and Wang Ping An) Oriental Group (600811.SH)'s performance in recent years has been unsatisfactory. Although the company has made efforts to focus on its main business and reduce losses, the company is expected to lose significantly again after 2021 and 2022 due to real estate disposal falling short of expectations.
This evening, Oriental Group announced its 2023 annual results forecast. The company expects to achieve net profit attributable to shareholders of listed companies of -1 billion yuan to 1.5 billion yuan in 2023; net profit attributable to shareholders of listed companies is expected to be 1.05 billion yuan to -1.55 billion yuan after deducting non-recurring profit and loss.
In fact, previously in 2021 and 2022, the company had significant losses of 1.72 billion yuan and 996 million yuan for two consecutive years. The company said it was also doing its best to take measures. Previously, in May, the company indicated on an interactive platform that there would be substantial progress in asset disposal of some real estate projects before the end of the year.
However, judging from the current report card, the disposal effect seems to have fallen short of expectations. “The company's subsidiary Dongfang Anyi (Beijing) Urban Development Investment Co., Ltd. strictly controls costs and actively promotes real estate asset-related disposal work, but due to the effects of the downturn in the real estate market and the slow recovery of market confidence, etc., the real estate sector's losses increased compared to the 2022 forecast.”
In addition, the company conducted preliminary impairment tests on assets showing signs of depreciation as of the end of the reporting period. It is estimated that the total amount of impairment will be about 700 million yuan to 1.1 billion yuan, of which the real estate cooperation project is expected to accrue an impairment amount of 500 million yuan to 900 million yuan.
However, compared to real estate disposal falling short of expectations, the company's focus on the main business seems to have achieved certain results. The company said, “The modern agriculture and health food industry, the main business, reduced losses year-on-year compared to 2022. The company's oil and fat business achieved a significant year-on-year reduction in losses.”
Looking ahead to 2024, the company has been seeking new profit growth points. Among them, the seawater potassium extraction project, which has always received much attention, may make substantial progress this year. The company's chairman Sun Mingtao said earlier, “The company's seawater potassium extraction (phase 1) project held a groundbreaking ceremony on June 29, 2023. The construction progress is currently normal. The company expects the construction period to take 10 months.” According to this estimate, if all goes well, the project is expected to be officially completed before May of this year.
Furthermore, the company previously stated that the acquisition of 25% of the shares of United Energy Group Co., Ltd. is progressing in an orderly manner. After the acquisition is completed, the company will use equity method accounting for United Energy to calculate the investment benefits enjoyed by the company based on the net profit situation of United Energy. However, it will take time to test the subsequent progress and results of the two major projects and whether they can solve the company's performance difficulties.