Fuxing China Group Limited: FY2025 Financial Results Analysis

Fuxing China Group Limited, a Bermuda-incorporated company listed on the Singapore Exchange, has released its condensed interim financial statements for the year ended 31 December 2025. This report provides a comprehensive review of the company’s financial performance, key metrics, and significant corporate developments, offering investors a clear perspective on its business trajectory.

Key Financial Metrics

• Revenue (FY2025): RMB 672.3 million, down 9% YoY
• Gross Profit (FY2025): RMB 49.5 million, up 8% YoY
• Net Profit (FY2025): RMB 20.5 million, up from RMB 0.9 million in FY2024
• Basic EPS (FY2025): RMB 1.15 (FY2024: RMB 0.04)
• Net Asset Value per Share (31/12/2025): RMB 29.6 (31/12/2024: RMB 33.3)
• Proposed Final Dividend (FY2025): RMB 0.15 per share (FY2024: Nil)
• Cash and Equivalents: RMB 191.9 million (up by RMB 22.3 million)

YoY and QoQ Financial Comparison

Note: “NM” = Not meaningful due to negative numbers or zero base.

Historical Performance Trends

• Revenue has shown a declining trend, with a 9% decrease YoY, primarily impacted by lower export sales in the Zipper segment, reduced trading activity, and the effect of higher US tariffs on Chinese imports.
• Gross Profit Margin improved from 6.2% in FY2024 to 7.4% in FY2025, mainly due to efficiency gains and automation in the Processing segment.
• Net Profit rebounded sharply, from RMB 0.9 million in FY2024 to RMB 20.5 million in FY2025, partly due to non-operating gains such as asset sales and reversal of provisions.

Exceptional Items and Notable Events

• Gain on Disposal of Subsidiary: RMB 20.2 million was recognized from the sale of Jinjiang Jianxin Weaving Co., Ltd., boosting net profit.
• Waiver of Director’s Receivable: RMB 10.5 million in costs related to an aborted Nasdaq listing were waived by the Executive Chairman, treated as income.
• Forfeiture of Advances from Customers: RMB 5.1 million recognized as other income, relating to prepaid orders not executed for over three years.
• Fair Value Loss: RMB 3.1 million recognized on investment property due to revaluation.

Dividends

• Proposed final dividend for FY2025: RMB 0.15 per share, the first since FY2024 when no dividend was declared. This reflects improved cash flows and profitability.

Corporate Actions and Capital Movements

• Share Placement: 3,000,000 new shares were issued in November 2025, raising RMB 6.26 million.
• No change in treasury shares: 277,720 shares held as treasury shares at year-end.
• Divestment: The sale of subsidiary Jianxin for RMB 46 million improved cash position and reduced deferred tax liabilities.

Directors’ Remuneration

• Total compensation to directors and key management was RMB 3.3 million (FY2024: RMB 3.5 million), with directors receiving RMB 1.2 million and other key management RMB 2.0 million. There were no defined contribution plans paid to key management.

Cash Flow and Financial Position

• Net cash generated from operating activities: RMB 44.3 million (FY2024: RMB 68.3 million), reflecting lower trade and other payable balances.
• Net cash from investing activities: RMB 30.7 million (FY2024: outflow of RMB 4.3 million), mainly from the subsidiary disposal.
• Net cash used in financing activities: RMB 31.7 million (FY2024: RMB 11.3 million), due to increased loan repayments.
• Short-term bank loans: Decreased by 56% to RMB 44.0 million.
• Net asset value per share: Declined to RMB 29.6 from RMB 33.3, reflecting higher share count and ongoing margin pressures.

Chairman’s Statement

“For the next 12 months, the Group expects its operating results will continue to be impacted by high production costs, low gross margin and its business outlook to be affected by uncertain customers’ demand amidst challenging China’s economic growth outlook. The recent tariffs announced by the United States of America on foreign imports from China and various countries could result in a more uncertain and volatile global trade environment. At present, while Management does not foresee a significant adverse impact arising from the higher tariff developments, Management will continue to closely monitor developments to mitigate any potential impact. In midst of the challenging business environment, Management has stepped up efforts to improve its operational performance. Management intends to target revenue growth and margin expansion through enhanced operational efficiency, utilising greater automation, and increased direct-to-brand sales. The Group will focus to execute the following plans and measures to improve its profitability: Enhancing quality and operational efficiency through further adoption of automation and digitlisation initatives and strengthen margin resilience across its three business segments. Prudent capital management by maintaining disciplined cost control and optimising capital structure to maintain financial flexibility and reduce financing costs. Deepening customer relationships via increased direct-to-brand sales, new product innovation, improving product quality, and enhancing responsiveness to market demand to harness new opportunities.”

The tone of the statement is cautiously optimistic but recognizes persistent challenges and margin pressures in the operating environment.

Outlook and Risks

• Management expects ongoing headwinds from production cost inflation, muted customer demand, and geopolitical factors (notably US tariffs).
• Focus remains on automation, cost discipline, and direct-to-brand sales to bolster resilience and profitability.
• Improved cash and reduced gearing following asset sales enhance financial flexibility for future initiatives.

Conclusion and Investment Recommendation

Overall, Fuxing China Group’s FY2025 performance reflects a return to profitability, improved gross margins, and stronger cash flows, mainly driven by one-off gains and effective cost controls. However, core revenue growth remains challenged by weak demand and global trade uncertainties.

• If you are currently holding this stock: Maintain a cautious hold. The company’s balance sheet has improved and a dividend is proposed, but underlying operating profitability is still under pressure. Monitor execution of automation and margin improvement strategies, watch for further progress in direct-to-brand sales, and remain alert to macro and policy risks.
• If you are not currently holding this stock: Consider waiting for more consistent evidence of core revenue and profit growth before initiating a position. The company’s recovery is currently supported by non-operating gains, and the external environment remains volatile.

Disclaimer: This analysis is based solely on the information provided in Fuxing China Group Limited’s FY2025 financial statements and does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance before making investment decisions.

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