Samarkand Group PLC (AQSE:SMK) said it remains in a strong position to ride out volatility in the Chinese economy and eventually capitalise on it, though the current year will be affected.
Having last year received strategic investment by China's largest logistics company and recently agreed an alliance with FedEx (NYSE:FDX) as it builds its partnership network, the cross-border e-commerce technology provider said its Nomad Checkout would see the launch of the first wave of enterprise clients in the first quarter of 2022.
Also, the company hailed the continued performance of its owned brands, including recently acquired Zita West growing revenues at a rate of 25%, and said it sees opportunity in expanding their presence and distribution domestically and internationally.
After a December update revealed broadly flat overall revenue in the first half feeding into growth of 15% and 25% in October and November, Samarkand said it expected “a number of externalities” in the Chinese market to have “a significant impact on the remainder of the financial year”.
Due to these market conditions and increased investment in its core technology, the Aquis-listed company said it expects revenue to be lower and its EBITDA loss higher for the current financial year.
“Despite short term volatility we do not see any structural challenges to the eCommerce market in China, which remains the biggest and most dynamic in the world. Our eCommerce platforms and logistics integrations mean we are in a strong position to ride out the volatility and ultimately capitalise upon it,” Samarkand said.
“The fundamentals of our eCommerce acceleration business remain strong. Our portfolio has recently been strengthened by the addition of Venture Life and we see further opportunity for brands of this nature leveraging our growing go to market infrastructure in China and we expect to update the market with material new client wins in due course.“