Baguio Green Shares Plunge 15% on 54% Profit Warning
HK01 · 1 SOURCESabout 1 hour ago2 MIN
Summary
Baguio Green Group (stock code: 1397), a prominent local cleaning services provider, experienced a sharp selloff in its shares on Thursday morning following a profit warning for the first half of 2024. The stock price plummeted to HK$0.78, representing a decline of 15.7%, with trading volume reaching approximately HK$630,000 .
Key Points
- Baguio Green Group (1397) issued a mid-term profit warning, estimating H1 2024 after-tax profit between HK$27 million and HK$30 million, down 49% to 54% year-on-year
- The company's shares fell to HK$0.78, marking a 15.7% intraday decline with trading volume of approximately HK$630,000
- The profit decline is attributed to reduced revenue and lower gross margins
- Intensifying competition in government cleaning contracts has led some market participants to adopt aggressive, commercially unsustainable pricing strategies
- Baguio Green stated it will maintain a prudent and disciplined bidding approach, focusing on quality, innovative, and differentiated services
Why It Matters
The steep profit warning highlights the intense price war gripping Hong Kong's cleaning services sector, where competitors are undercutting each other to win government contracts at unsustainable levels. This development raises concerns about the long-term financial health of smaller cleaning operators and could prompt the government to review its procurement policies to ensure contractors maintain viable service standards .
The steep profit warning highlights the intense price war gripping Hong Kong's cleaning services sector, where competitors are undercutting each other to win government contracts at unsustainable levels. This development raises concerns about the long-term financial health of smaller cleaning operators and could prompt the government to review its procurement policies to ensure contractors maintain viable service standards .