Shouhui Group Limited Issues Profit Warning: Significant Reversal from Loss to Profit Expected in 2025

Shouhui Group Limited (Stock Code: 2621) has released an important announcement regarding its financial outlook for the year ended December 31, 2025. This notice, issued pursuant to Hong Kong Stock Exchange regulations, contains several key points and price-sensitive information that investors and shareholders should be aware of.

Key Financial Highlights

• Net Profit Forecast for 2025: The Group expects to record a net profit in the range of RMB780 million to RMB800 million. This marks a dramatic turnaround compared to the net loss reported for the year ended December 31, 2024. The improvement represents an increase of RMB916 million to RMB936 million year-on-year.
• Main Driver of Profit Swing: The primary reason for this change is the gain on changes in the carrying amounts of financial instruments issued to investors. This gain is anticipated to increase by RMB964 million in 2025 compared to the loss recorded in 2024.

Adjusted Net Profit (Non-HKFRS Measure)

• Adjusted Net Profit for Shareholders: Despite the headline profit, adjusted net profit attributable to shareholders (excluding share-based compensation, listing expenses, and changes in financial instruments) is expected to be between RMB186 million and RMB206 million. This represents a decline of RMB36 million to RMB56 million from the adjusted net profit for 2024.
• Reasons for Decline:
  • Increased uncertainty in the macroeconomic environment
  • Slowdown in financial consumer demand
  • Reduction in insurance intermediary brokerage rates due to new industry policy enforcing unified reporting and execution
  • Heightened market competition

Revenue and Costs

• Revenue: For 2025, revenue is expected to be in the range of RMB1,455 million to RMB1,475 million, an increase of RMB68 million to RMB88 million compared to 2024.
• Costs and Expenses: Costs and expenses are forecasted to rise by RMB104 million to RMB124 million year-on-year, outpacing the growth in revenue.

Operational and Financial Position

• The Board reassures investors that, notwithstanding the changes highlighted above, the Group’s overall operation, financial position, and cash flow condition remain healthy.

Important Considerations for Shareholders

• Price Sensitive Information: The substantial swing from loss to profit, largely driven by accounting gains on financial instruments rather than core operational improvements, is highly price sensitive and may influence the share price.
• Caution Advised: Shareholders and potential investors are cautioned that the financial information released is based on unaudited management accounts and may differ from the final audited results. The official results for 2025 will be published by the end of March 2026.
• Future Outlook: The company expects continued challenges from the macroeconomic environment, industry policy changes, and competitive pressures, impacting core profitability despite headline financial improvements.

Corporate Governance Update

• Board composition as of the announcement date includes: Mr. Yao Guang (Executive Director, Chairman, CEO), Mr. Liwei Han, Ms. Li Liu, Mr. Jianting Li (Executive Directors), Mr. Byron Ye, Mr. Sirui Li (Non-Executive Directors), and Mr. Gang Shen, Mr. Haiquan Wu, Mr. Yuanxin Zhang (Independent Non-Executive Directors).

Conclusion

This announcement signals a major turnaround in headline profitability for Shouhui Group Limited in 2025, driven by accounting gains rather than operational growth. Investors should closely monitor subsequent official disclosures and assess the sustainability of these financial improvements in light of ongoing industry and macroeconomic challenges.

Disclaimer: The information presented above is based on management accounts and unaudited preliminary data provided by Shouhui Group Limited. Investors are strongly advised to exercise caution when trading in the company’s securities and await the final audited results, which may differ from the figures discussed. This article does not constitute investment advice.

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