Southern Packaging Group Limited: H1 2025 Financial Analysis
Southern Packaging Group Limited, listed on the SGX Main Board, released its unaudited half-year financial results for the period ended 30 June 2025. The Group manufactures packaging products for foodstuff, medical, and cosmetic industries, and is also involved in property development. This article analyzes the key financial metrics, performance trends, and significant disclosures from the report.
Key Financial Metrics & Comparative Table
| Metric |
H1 2025 |
H2 2024 (QoQ) |
H1 2024 (YoY) |
YoY Change |
QoQ Change |
| Revenue |
RMB 285.08M |
RMB 333.69M |
RMB 333.69M |
-14.57% |
-14.57% |
| Gross Profit |
RMB 42.48M |
RMB 67.81M |
RMB 67.81M |
-37.36% |
-37.36% |
| Gross Profit Margin |
14.90% |
20.32% |
20.32% |
-5.42pp |
-5.42pp |
| Net Profit / (Loss) |
(RMB 22.72M) |
RMB 0.50M |
RMB 0.50M |
NM |
NM |
| EPS (Basic & Diluted) |
(RMB 0.33) |
RMB 0.01 |
RMB 0.01 |
NM |
NM |
| Interim Dividend / Share |
None |
None |
None |
No change |
No change |
| Net Asset Value / Share |
RMB 6.85 |
RMB 7.17 |
RMB 7.17 |
-4.5% |
-4.5% |
Historical Performance Trends
Southern Packaging Group’s H1 2025 results show a notable deterioration compared to H1 2024. Revenue declined 14.6%, gross profit dropped 37.4%, and the company swung to a net loss of RMB 22.7 million from a small profit last year. Gross profit margin compressed by 5.4 percentage points, indicating intensified margin pressure and market competition.
Exceptional Expenses and Earnings
No exceptional earnings or expenses were recognized in H1 2025. There were no significant impairment charges, new provisions, or asset revaluations during the period. The company did not recognize any loss allowance for trade receivables or inventory obsolescence, indicating stable asset quality, but also reflecting low activity in asset adjustments.
Chairman’s Statement
“In the first half of 2025, the Group experienced a decline in order volume and pricing from existing customers, reflecting continued softness in downstream demand and intense industry competition. Although raw material prices slightly decreased, overall margin pressure remained due to overcapacity and aggressive pricing across the market.
Amid these challenges, the Group advanced product innovation by developing new customer products and upgrading existing ones, which will contribute positively to future sales and gross profit. Going forward, the Group will focus on product mix optimization, cost efficiency through lean production and digital systems, and the expansion of both domestic and export channels to gradually restore growth and profitability.
Visitor traffic at Apex Tower continued to improve during the first half of 2025, and efforts to achieve sales targets remain ongoing. However, no units have been sold year-to-date, highlighting the need to expand our marketing outreach and engage a broader base of potential investors.”
The chairman’s tone is cautious yet determined, acknowledging industry headwinds but emphasizing ongoing innovation and operational improvements.
Directors’ Remuneration
| Remuneration Type |
H1 2025 |
H1 2024 |
| Director’s Fees |
RMB 336,000 |
RMB 360,000 |
| Salaries, bonuses, allowances |
RMB 1,941,000 |
RMB 1,900,000 |
| Defined Contribution Plans |
RMB 22,000 |
RMB 19,000 |
Related Party Transactions
| Related Party |
Transaction Type |
Value (RMB) |
| Guangdong Xing Hua Health Drink Co. Ltd |
Rental Payment |
1,176,472 |
| Pan Shun Ming, Mai Shu Ying |
Rental Payment |
425,845 |
| Foshan Jia Bei Le Property Mgmt Co. Ltd |
Property Management Fee |
515,057 |
Events and Risks Affecting the Business
- No lawsuits, natural disasters, or legal disputes reported for the period.
- Macroeconomic pressures: Weak domestic demand, tariff impacts on exports, and policy changes in healthcare affected pharmaceutical sales and overall industry competitiveness.
- No asset sales, IPOs, or fundraising activities reported.
- No share buybacks, dilution, or placements occurred. Total shares outstanding unchanged at 70,319,164.
Cash Flow and Liquidity
Operating cash inflow for H1 2025 was RMB 6.6 million, down from RMB 14.1 million in H1 2024. Investing outflows increased due to higher capex on PPE. Net cash inflows from financing came in at RMB 6.3 million, mainly due to increased borrowings. Overall, cash and cash equivalents rose to RMB 66.5 million by period end, indicating adequate liquidity despite the loss.
Outlook
The Group is facing persistent margin compression, weak demand, and aggressive industry competition. Although it is actively improving product innovation and operational efficiency, these efforts have yet to manifest in financial recovery. No dividend was declared due to the loss, and property development sales remain stagnant.
Conclusion and Investment Recommendation
Overall Assessment: Southern Packaging Group Limited’s H1 2025 results are weak, with deteriorating revenue, gross profit, and a swing to net loss. The company is taking steps towards innovation and cost efficiency, but near-term visibility remains poor given macroeconomic and industry headwinds.
Investor Recommendations
-
If you currently hold the stock: Consider reducing exposure or holding only if you believe in management’s ability to execute the turnaround. Short-term risks are elevated, and the absence of dividends and persistent losses may weigh on the share price.
-
If you do not currently hold the stock: It is prudent to remain on the sidelines until clearer signs of revenue and margin recovery, or until management demonstrates consistent execution of its turnaround strategy.
Disclaimer: This analysis is based solely on the disclosed financial report and does not constitute investment advice. Investors should conduct their own due diligence and consult a licensed financial adviser before making investment decisions.
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