AUX Electric Co., Ltd. Issues Profit Warning for FY2025: Profit Expected to Drop Sharply

Key Highlights from the Announcement

• Profit Warning Issued: AUX Electric Co., Ltd. (“the Company”) has issued a profit warning for the financial year ended December 31, 2025.
• Revenue Projection: The Group anticipates reporting revenue of approximately RMB30 billion for FY2025, a marginal increase from RMB29.76 billion in FY2024.
• Significant Decline in Net Profit: Profit attributable to owners of the Company is expected to fall to approximately RMB2.2 billion for FY2025, compared to RMB2.91 billion for FY2024. This represents a year-on-year decrease of about 24.4%.
• Main Reasons for Profit Decline:
  • Continued rise in raw material costs
  • Elevated channel inventory levels
  • Subdued end-consumer demand
  • Increased competition in the domestic market, exerting downward pressure on selling prices of air conditioners
  • Reduction in the Group’s gross profit margin
• Unaudited Figures: The financial information is based on a preliminary review of unaudited consolidated management accounts and may be subject to adjustments.
• Final Results Pending: The final audited results will be disclosed in the annual results announcement expected in March 2026.

Details Investors Need to Know

The Board of Directors felt it necessary to make this announcement pursuant to the disclosure requirements of the Hong Kong Stock Exchange Listing Rules and relevant inside information provisions. The announcement is intended to inform shareholders and potential investors about the anticipated significant decrease in net profit, which is primarily driven by tough market conditions and operational pressures.

The announced profit warning is a material event that could influence the Company’s share price. The main drivers of the profit decline—rising input costs, high inventory, weak consumer demand, and increased market competition—are fundamental challenges that may continue to impact the Group’s performance in the near term. The reduction in gross profit margin should be carefully considered by investors as it points to both external pressures and potential internal cost management issues.

As the results have not been audited or reviewed by the Company’s auditors or the audit committee, there is still a possibility for the figures to be adjusted before the final annual results are published. Investors should exercise caution and await the full annual results for further clarity.

Board Statement

The announcement was made under the authority of Mr. Zheng Jianjiang, Chairman of the Board and Executive Director, with the Board reiterating that shareholders and potential investors should exercise due care when dealing in the shares of the Company.

Directors as of Announcement Date

• Executive Directors: Mr. Zheng Jianjiang, Mr. Xin Ning
• Non-executive Directors: Mr. Zheng Jiang, Mr. He Xiwan, Ms. Li Jian
• Independent Non-executive Directors: Mr. Xiang Wei, Dr. Jing Xian, Mr. Tao Shengwen

Implications for Shareholders

The profit warning issued by AUX Electric Co., Ltd. is a significant event and could be price sensitive. The expected sharp decline in profit, despite stable revenues, signals operational and market headwinds that are likely to affect investor sentiment and could result in volatility in the Company’s share price. Shareholders and potential investors are strongly advised to closely monitor further disclosures and the upcoming annual results announcement.

Disclaimer: This article is a summary and analysis based on the Company’s official announcement. The information is for reference purposes only and does not constitute investment advice. Investors are urged to review the Company’s forthcoming audited annual results and consult with professional advisers before making any investment decisions.

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