Summary of Key Points
- Profit Warning: The Company expects net profit attributable to the parent for FY2025 to be between RMB150 million and RMB200 million, representing a sharp decline of 60.3% to 70.2% compared to FY2024.
- Major Causes: Increased costs from tariff policy adjustments, high investment in strategic incubation projects, rising operating costs due to leased warehouses, and losses from expanding the self-delivery business.
- Uncertainty: The announced figures are based on unaudited management accounts and may differ from final audited results.
- Expected Timeline: The audited annual results for FY2025 are scheduled to be released by the end of March 2026.
Detailed Analysis
AuGroup (SHENZHEN) Cross-Border Business Co., Ltd., a joint stock company listed in Hong Kong (Stock Code: 2519), has issued a profit warning for the financial year ended 31 December 2025. The Board has informed shareholders and investors that the Group’s net profit attributable to the parent is set to drop dramatically, landing between RMB150 million and RMB200 million. This is a substantial decrease—between 60.3% and 70.2%—from the previous year’s figures.
Reasons Behind the Profit Decline
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Tariff Policy Adjustments: The Group’s sales of goods business faced significant increases in overall costs due to changes in tariff policies during the reporting period. This has directly impacted profitability.
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High Investment in Incubation Projects: Strategic incubation projects within the sales of goods segment are still in early stages and require high investment. These costs have diluted the Group’s overall profit for the year.
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Logistics Solutions – Leased Warehouses: The Group expanded its logistics solutions business by adding leased warehouses. This move has led to higher amortization of newly added right-of-use assets, substantially increasing operating costs. While revenue growth from these assets has yet to fully materialize, the increased costs have contributed to a decline in net profit.
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Logistics Solutions – Self-Delivery Business Expansion: In 2025, the Group began expanding its self-delivery business. However, the initial operations suffered from insufficient order volume and low order density, resulting in high distribution operation costs and transit and sorting expenses. This segment has generated significant overall losses.
Implications for Shareholders
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Price Sensitivity: The expected profit decline is substantial and may have a direct impact on share prices once the final results are announced.
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Business Strategy Risks: Investors should be aware that the Group’s aggressive expansion and investment in new projects, while potentially beneficial in the long run, are currently weighing on profitability.
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Caution Advised: The Board has specifically advised shareholders and potential investors to exercise caution in dealing in the company’s shares due to this outlook.
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Final Results Pending: The disclosed figures are based on unaudited management accounts and subject to change after audit. The official 2025 annual results announcement is expected by the end of March 2026.
Board Composition
The Board is currently comprised of Mr. Lu Haizhuan (Chairperson, Executive Director and CEO), Mr. Ze Kuaiyue, Ms. Zhuang Liyan, and Mr. Yu Fenglu as executive directors; Ms. Zhang Li as a non-executive director; and Ms. Meng Rongfang, Mr. Chen Xiaohuan, Ms. Gao Yu, and Mr. Liu Yong as independent non-executive directors.
Conclusion
AuGroup (SHENZHEN) Cross-Border Business Co., Ltd. is undergoing a challenging transition period with new strategic investments and expansion initiatives impacting short-term profitability. The sharp decline in expected profits is a significant development for investors, with the potential to influence share price and market sentiment. Investors are urged to monitor the upcoming official results announcement and exercise caution.
Disclaimer: This article is based on preliminary information disclosed by AuGroup (SHENZHEN) Cross-Border Business Co., Ltd. The figures are unaudited and may differ from final audited results. Investors should not rely solely on this information for investment decisions and are advised to review the upcoming official annual results announcement and consult professional advisors as appropriate.
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