JH Educational Technology Inc. Issues Significant Profit Warning for FY2025

JH Educational Technology Inc. (“the Company”) has issued a profit warning, signaling a substantial decrease in its consolidated net profit attributable to owners for the fiscal year ended 31 December 2025.

Key Points for Investors

• Expected Profit Decline: The Company anticipates a decrease of approximately 25% to 30% in consolidated net profit for FY2025 compared to FY2024. This is a material reduction and is likely to be price-sensitive.
• Causes of Decline:
  • Major Renovations: Significant renovations were conducted on student dormitories at the Group’s operating college in Hangzhou. The residual value of these renovations as of year-end FY2025 was written off, resulting in a loss recorded on the disposal of property, plant, and equipment.
  • Increase in Personnel Costs: The Company recruited more teachers during FY2025 to support a new campus expected to commence operations in September and to improve teaching quality. This led to a notable rise in salaries and benefits.
• Financial Reporting Status: The annual results for FY2025 are still being finalized. The figures provided are based on preliminary management accounts and have not been confirmed, reviewed, or audited by the Company’s auditors or audit committee.
• Disclosure Timeline: Further detailed financial information will be released in the annual results announcement, expected by the end of March 2026.

Implications for Shareholders

• The anticipated profit decline is material and may influence share price negatively upon further confirmation and disclosure.
• The write-off of dormitory renovations and increased staff costs are one-off and recurring expenses respectively, indicating both short-term and potential ongoing financial pressures.
• Investors should exercise caution, as the preliminary figures are not audited and may be subject to change.
• The Company has explicitly cautioned shareholders and potential investors not to unduly rely on the preliminary data and to act prudently when dealing in the Company’s shares.

Board and Management

The announcement was authorized by the Board, chaired by Mr. Chen Yuguo. The Board comprises five executive directors, one non-executive director, and three independent non-executive directors.

Conclusion

The profit warning issued by JH Educational Technology Inc. is likely to be seen as a negative development by the market, particularly considering the magnitude of the expected decline in net profit. The underlying reasons for the decline—a substantial write-off and a significant increase in personnel costs—reflect both strategic investments and operational challenges.

Investors are advised to monitor forthcoming disclosures and exercise caution in trading the Company’s shares in light of this announcement.

Disclaimer: This article is based on information provided by JH Educational Technology Inc. and is intended for informational purposes only. The financial figures discussed are preliminary and unaudited. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The author assumes no liability for any losses arising from reliance on this information.

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