Wahsun Handbags International Holdings Ltd (SEHK: 2683) has issued a positive profit alert, forecasting that the company's attributable net profit for the fiscal year ending March 31, 2026, will increase to no less than HK$84 million.

This projected figure represents a significant rise compared to the attributable net profit of approximately HK$64 million recorded for the corresponding period in the previous fiscal year.

Key Drivers of Profit Growth

The company attributes the anticipated profit growth primarily to a substantial increase in revenue, which is expected to rise by approximately HK$126 million to about HK$850 million for the reporting year, marking a growth of roughly 17% from the previous year's figure of approximately HK$724 million.

This revenue surge is driven mainly by continuous orders from new clients secured during the reporting year and increased sales from the European market, particularly the Netherlands.

Additionally, the growth in the volume of goods sold has contributed to higher revenue.

The company also reported that the successful implementation of stringent cost-control measures has effectively reduced fundamental production and operational costs, leading to an improvement in both gross profit and gross profit margin.

Consequently, the gross profit for the reporting year is expected to be higher than that of the previous year.

Factors Partially Offsetting Growth

However, the company noted that this profit increase is partially moderated by several factors.

These include a rise in administrative expenses, primarily due to increased employee benefit costs aligned with higher sales activity levels.

Other moderating factors are a decrease in foreign exchange gains for the reporting year, an increase in impairment provisions for trade receivables under the expected credit loss model, consistent with the overall rise in trade receivables, and a higher income tax expense resulting from an increase in taxable profit for the reporting year.

In contrast, the previous year had recorded a reversal of impairment provisions due to the recovery of certain previously provided-for receivables.