Ruichang International Issues Profit Warning for FY2025: Significant Decline in Net Profit Expected

Ruichang International Holdings Limited (HKEX: 1334) has issued a profit warning that is highly relevant for investors and could have a material impact on the company’s share price. The announcement, released on March 11, 2026, outlines a significant decline in the Group’s net profit for the financial year ended 31 December 2025, compared to the previous year.

Key Highlights of the Profit Warning

• Expected Net Profit Decline: The Group anticipates reporting a net profit in the range of approximately RMB 4 million to RMB 5.5 million for FY2025, a substantial decrease from the net profit of approximately RMB 10.3 million recorded in FY2024. This represents a year-on-year decrease of approximately 46.6% to 61.2%.
• Principal Reasons for the Profit Decline:
  • Industry Slowdown: The company cites a continued slowdown in capital investment in the petroleum refinery and petrochemical industry, coupled with weakening downstream market demand. These factors led certain customers to temporarily suspend or defer orders for key material equipment. As a result, the Group experienced delays in product delivery, revenue recognition, and overall revenue growth, which fell short of previous expectations.
  • Decreased Gross Profit Margins: Intensified competition in the domestic market has led to a reduction in gross profit margins.
  • Rising Costs and Expenses: The Group faced increased staff costs, selling expenses, and administrative expenses as it continues to develop and expand its overseas market operations and its phosphorus-containing waste recycling project in Huangshan.
• No Auditor Review Yet: The figures provided in this announcement are based on a preliminary assessment of the unaudited consolidated management accounts for the year. These results have not yet been audited or reviewed by the company’s auditors or audit committee, and are subject to final adjustments.
• Results Announcement Timeline: The audited annual results for FY2025 are expected to be released by the end of March 2026.

Potential Share Price Impact and Investor Considerations

• Price Sensitivity: The significant year-on-year drop in net profit, coupled with ongoing industry headwinds and rising costs, is a material development that may impact investor sentiment and could exert downward pressure on the company’s share price.
• Operational Challenges: Investors should note ongoing challenges in the Group’s key industries, including delays in customer orders, intensified competition, and the increased cost burden from expansion projects, all of which could affect future performance.
• Management’s Caution: The Board advises shareholders and potential investors to exercise caution when dealing in the company’s securities, pending the release of the audited results.

Company Leadership and Board Composition

As of the date of the announcement, the Board of Ruichang International comprises:
Executive Directors: Mr. LU Bo (Chairman, CEO), Ms. LU Xiaojing, Ms. BAI Wei, Mr. SHAO Song, Ms. WU Rui.
Independent Non-Executive Directors: Mr. BAU Siu Fung, Mr. SHEN Cheng, Mr. JIANG Li.

Conclusion

This profit warning signals a challenging period for Ruichang International Holdings Limited, with a marked decrease in profitability and several operational headwinds. Investors are advised to closely monitor the company’s official audited results and consider the risks outlined above when making investment decisions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research and consult with professional advisers before making any investment decisions. The information presented is based on preliminary unaudited figures which may be subject to changes.

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