According to the Zhitong Finance App, Pelinong (01498) announced its 2023 results, with revenue of about HK$407 million, a year-on-year decrease of 9.2%; gross profit of about HK$217 million, a decrease of 17.5%; net loss of HK$106 million, a year-on-year decrease of 11.76%; and a loss of HK26.85 cents per share.

The gross margin was 53.2%, down 5.4% from 58.6% last year. The decrease in gross margin is due to the fact that the cost of concentrated Chinese medicine formula granules produced according to the new standards has decreased the gross margin of the concentrated Chinese medicine formula segment in China, while the market is still adjusting to adopt higher pricing, and the combined impact of the decline in gross margin in the cultivation segment due to discounted sales of Chinese herbal medicines that are slow to sell in Guizhou.

The net loss was mainly due to the following factors: the implementation of the new national standard policy for concentrated Chinese medicine formula granules led to a slowdown in China's concentrated Chinese medicine formula granule business; and confirmation that biological asset impairment losses relating to the Group's cultivation division were HK$16.8 million, while the fair value loss for biological assets last year was HK$36.7 million.