Key Highlights

• Substantial Decrease in Profit: China Starch Holdings Limited expects a significant drop in profit before taxation—approximately 64% lower compared to 2024.
• Revenue Decline: Total revenue for the year ended 31 December 2025 is projected at RMB10,058 million, down from RMB11,415 million in 2024.
• Multiple Adverse Factors: The company cites several reasons for the decline, including rising raw material costs, oversupply in key sectors, export disruptions, and production limitations.

Detailed Analysis

China Starch Holdings Limited, a Cayman Islands-incorporated company listed on the Hong Kong Stock Exchange (Stock Code: 3838), has issued a profit warning for the year ending 31 December 2025. The Board has informed shareholders and potential investors that the Group expects both revenue and profit before taxation to drop sharply. The anticipated profit reduction is particularly severe, with a decrease of around 64% compared to the previous year.

Factors Contributing to the Decline

1. Rising Corn Kernel Prices: The company’s exceptional performance in 2024 was largely driven by lower corn kernel costs. However, in 2025, corn kernel prices have increased for three consecutive quarters, exerting significant cost pressure and negatively impacting profit margins.
2. Oversupply and Market Price Pressure: Persistent oversupply in China’s cornstarch and lysine sectors has kept product prices under sustained downward pressure. Notably, lysine prices slumped in the second half of 2025, further eroding the Group’s profitability.
3. Export Disruptions Due to Anti-Dumping Investigations: Several countries launched anti-dumping investigations targeting Chinese-made lysine in 2025. This led to reduced overseas orders, forcing the company to redirect products originally meant for export into the domestic market. The resulting supply surplus intensified price declines in China.
4. Production Expansion Impact: The Group’s cornstarch production expansion project at its Linqing production complex temporarily reduced capacity, as one production line was demolished to facilitate expansion-related construction works.
5. Missed Traditional Peak Seasons: The expected peak demand periods, including the National holidays and summer months, did not materialize for starch-based sweetener products during 2025, further impacting revenue.

Implications for Shareholders

• Potential Price Sensitivity: The sharp decline in both revenue and profit before taxation is likely to be highly price-sensitive and could affect the share value of China Starch Holdings Limited.
• Uncertainty About Final Results: The figures disclosed are based on preliminary unaudited management accounts. The final audited results may differ, and shareholders should monitor the forthcoming annual results announcement, expected in March 2026.
• Strategic and Operational Risks: The combination of rising costs, unfavorable market conditions, and production disruptions point to heightened operational risks for the Group in 2025.

Board and Management

The announcement was made by Chairman Tian Qixiang, with the Board comprising key executive directors and independent non-executive directors. The company remains committed to transparency and will publish its official annual results in March 2026.

Investor Advisory

Shareholders and potential investors are strongly advised to exercise caution when dealing in the shares of China Starch Holdings Limited. The Group’s financial outlook for 2025 is significantly weaker than the prior year, with multiple adverse factors contributing to the decline. Investors should await the official audited results and remain vigilant for further developments.

Disclaimer

The information presented in this article is based on preliminary unaudited accounts and official company announcements. Actual results may differ following audit and review. This article does not constitute investment advice; investors should conduct their own due diligence and consult professional advisors before making any investment decisions.