Yashili International Holdings, the mainland's third largest baby milk formula firm by sales, said yesterday it expected profits to drop by 30 to 40 per cent year on year for the first half.
The company said in a statement that it expected a profit decrease mainly because of rising raw material costs, advertising expenses and the rising tax rates.
Tax rates increased because certain tax benefits previously enjoyed by the group had ended.
Yashili said it still expected revenue for the first half to record an increase compared with the same period last year.
The forecast was based on 'a preliminary assessment by the board based on information currently available to it', the company said.
Results for the six months ending on June 30 will be announced next month.
The dairy company raised US$349 million in its Hong Kong initial public offering in October last year. US investment firm Carlyle Group owns a 24.26 per cent stake in the company.