KraussMaffei expects losses of 250-300 million yuan in 2021

KraussMaffei Co.
, Ltd.
(hereinafter referred to as the "Company") recently announced that the expected net profit in 2021 is -250 million to -300 million (currency unit: RMB, the same below)
.

Raw material prices

Krause said that in 2021, although the global economy has not been completely free from the impact of the new crown epidemic, it has shown signs of recovery
.
However, rising raw material prices and shortages have led to global supply chain issues that will emerge in 2021, especially in the second half of the year
.
Affected by the above-mentioned circumstances, the company suffered a loss in annual results
.

In 2021, the downstream industries closely related to the company's business will show obvious signs of recovery in 2021
.
In the face of a positive market environment, the company strives to win orders, continuously expands new customers, and strives to maximize orders
.
The company's newly signed orders in 2021 and the orders in hand at the end of 2021 have a good upward trend compared with 2020
.

Supply chain problems lead to increased input costs such as logistics and labor

Affected by global supply chain problems, such as the shortage of important raw materials such as semiconductors, the company's production and operation have been greatly affected
.
In addition, due to the influence of various factors such as logistics and transportation, the delivery cycle of the company's main products has increased
.
Therefore, despite the year-on-year increase in new orders signed throughout the year, the company's operating income in 2021 is basically the same as in 2020
.

Supply chain problems have also led to a sharp rise in various production costs, and input costs such as bulk commodities, logistics, and labor are all increasing
.
The average prices of bulk commodities, such as copper and steel, will increase significantly in 2021 compared with 2020, and the cost of shipping will also show a larger upward trend in 2021
.
The increase in costs will lead to a decline in the company's gross profit margin in 2021.
Since the company's product prices in the market cannot make up for the additional costs, the company's loss in 2021 will increase compared with 2020
.