Tongdao Liepin Group, previously known as Wise Talent Technology Services Co (6100:HKG), issued a profit warning earlier this week for the three months ended 31 March 2023.

The group is expecting a net loss of not more than RMB 49.0 million will be recorded for the three months ended 31 March 2023, as compared to the net profit of RMB 13.2 million (USD 1.8 million) for the three months ended 31 March 2022. Q1 revenue is also expected to decrease over the year.

The Board considered that the turnaround in results for the three months ended 31 March 2023 was mainly attributable to the following factors:

1)     Due to the impact of the macro environment, recruitment demand in 2022 was limited, resulting in a year-on-year decrease in cash billings in advance of the company in 2022, which has an impact on the revenue that can be recognised in 2023. In addition, in the first quarter of 2023, the market is in the early stage of recovery, and the recruitment needs of business customers are still in the process of recovery. As a result, the company’s revenue recognized in the first quarter of 2023 decreased year-on-year.

2)     The company made a large-scale one-off marketing campaign during the 2022 World Cup, with a portion of advertising resources consumed and expenses recognized in the first quarter of 2023.

Tongdao Liepin Group shares closed on Tuesday at HKD 9.30 (USD 1.19), down 0.53% on the day. The company has a market cap of HKD 4.72 billion (USD 603.87 million).