Homar delivered Net Loss in Second Consecutive Year

Guangzhou Homar Bio-Technology Co., Ltd. (Homar), the Chinese NEEQ listed cosmetics producer, reported net loss of 1.65 million yuan ($0.24 million) in 2022. The company has suffered losses in second consecutive year.

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Guangzhou Homar Bio-Technology Co., Ltd. (Homar), a cosmetics company listed on China National Equities Exchange And Quotations (NEEQ), released its 2022 annual report, which showed a non-GAAP net loss of 14.55 million yuan ($2.11 million). This is the second consecutive year that Homar has suffered losses.

In 2022, Homar's revenue reached 35.20 million yuan ($5.11 million), a year-on-year increase of 4.16%. The net loss attributable to the listed company's shareholders was 1.65 million yuan ($0.24 million), while the non-GAAP net loss attributable to the listed company's shareholders after deducting non-recurring gains and losses was 4.55 million yuan ($2.11 million).

Homar was established in 2011 and listed on the NEEQ in 2016. The company is mainly engaged in the research and development, production, and sales of cosmetics such as cleansing, skincare, and personal hygiene products. Its main business is to provide professional cosmetics OEM and ODM production services to customers, including various types of clients such as domestic and overseas cosmetics brand companies, department store retail enterprises, cosmetics agents, chain enterprises, e-commerce retail platforms, etc. Its clients include Marks & Spencer, Watsons, and others.

Homar's main customers are five companies, including MELLER DESIGNS SOLUTIONS LTD., Anti-wrinkle Family (Guangzhou) Biotechnology Co., Ltd., and Guangdong Zhengmingming Cosmetics Technology Co., Ltd.

In terms of regional segmentation, revenue from domestic customers was 18.30 million yuan ($2.66 million), down 12.72% compared to 2021. Revenue from overseas customers reached 16.90 million yuan ($2.45 million), saw growth of 31.78%, mainly due to an increase in orders from foreign customer MB.

In addition, in 2021, Homar's revenue was 33.80 million yuan ($4.90 million), with a decrease of 73.37%. The net loss attributable to the listed company's shareholders was 32.49 million yuan ($4.71 million), down1,175.30%, which turned from profit to loss.

Regarding Homar's continued losses in 2022, some media outlets analyzed that this was partly due to credit impairment losses from litigation cases and an increase in total borrowing and interest expenses, resulting in a 61.47% increase in financial expenses and partly due to exchange losses.