SIM Technology Group Issues Profit Warning with Significantly Reduced Loss for FY2025

Key Points for Investors

• SIM Technology Group Limited expects to report a substantially narrowed loss for the financial year ended 31 December 2025 (“FY2025”), with estimated losses ranging between HK\$5 million and HK\$20 million.
• This is a dramatic improvement compared to the loss of approximately HK\$95 million recorded for the year ended 31 December 2024 (“FY2024”).
• The announcement is price sensitive as it reflects a significant turnaround in the company’s financial performance, which may impact investor sentiment and the company’s share price.

Details and Insights for Shareholders

The board of directors of SIM Technology Group Limited has issued a profit warning, notifying shareholders and potential investors that, based on the preliminary review of unaudited consolidated management accounts and currently available information, the Group is expected to record a loss attributable to owners of the Company in the range of HK\$5 million to HK\$20 million in FY2025. This marks a substantial decrease in losses compared to FY2024, when the Group reported a loss of approximately HK\$95 million.

Factors Contributing to Reduced Losses

1. Operational Improvements: The Group undertook systematic enhancements in operational awareness among employees, implemented optimized appraisal and incentive mechanisms, and carried out effective cost-control measures. These steps led to a further reduction in labour costs compared to the previous year.
2. Increased Factory Utilization: By boosting factory usage, the Group was able to realize economies of scale, improving overall efficiency and lowering per-unit costs.
3. Product Portfolio Optimization: The Group proactively phased out projects with negative gross margins and low efficiency, leading to a gradual improvement in product structure.
4. One-Time Exchange Loss in 2024: The dissolution of several subsidiaries in the People’s Republic of China in 2024 resulted in a one-off exchange loss of around HK\$30.8 million, which negatively impacted FY2024 results but will not recur in FY2025.

Matters Requiring Attention

• Valuation and Impairment Assessments Still Pending: The reported FY2025 figures are preliminary and subject to adjustments. The Company is still finalizing the change in fair value of financial assets and investment properties and conducting impairment assessments on certain current and non-current assets. The final loss figure may change after these assessments are completed.
• Unaudited Figures: The information is based on unaudited management accounts and has not yet been audited or reviewed by the Company’s auditors. Investors should be aware that figures may be adjusted upon further review.
• Investor Caution: Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company in light of the potential financial adjustments and the sensitive nature of the information disclosed.

Board Composition

As of the announcement date (4 March 2026), the Board comprises executive Directors Mr. Wong Cho Tung (Chairman), Ms. Yeung Man Ying, Mr. Zhu Wenhui, and Mr. Zhu Qi; non-executive Director Mr. Wong Hei, Simon; and independent non-executive Directors Ms. Lai Ka Fung May, Mr. Li Minbo, and Mr. Yang Wentao.

Conclusion

The significant narrowing of losses for FY2025, driven by operational improvements, cost controls, and strategic restructuring, is a noteworthy development for SIM Technology Group Limited. Investors should pay close attention to the final audited results, as adjustments may occur, but the overall trend points to a marked improvement in the Group’s financial health and operational efficiency. This news is likely to be price sensitive and could have a positive impact on the Company’s share price, subject to market interpretation and the finalization of results.

Disclaimer: The information in this article is derived from the Company’s official announcement and is intended for informational purposes only. It does not constitute investment advice. Investors should exercise caution, consider their own investment objectives and circumstances, and seek professional advice where necessary. The actual financial results may differ from the estimates provided, and the Company assumes no responsibility for any investment decisions made based on this information.

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