Huayu Expressway Group Limited Issues Significant Profit Warning for FY2025

Key Points Investors Must Know

• Substantial Drop in Revenue: The Group expects to record revenue for the year ended 31 December 2025 in the range of RMB138.6 million to RMB153.2 million, a sharp decrease from RMB198.1 million recorded in 2024.
• Sharp Increase in Losses: The loss attributable to shareholders for FY2025 is expected to be between RMB33.2 million and RMB36.8 million. This is a significant deterioration compared to the loss of RMB7.1 million in 2024.
• Reason for Downturn: The main factor leading to lower revenue and higher losses is a substantial decrease in sales of wine and liquors, attributed to the continued contraction of the consumer market in the People’s Republic of China.
• Preliminary Data: The financial figures announced are based on unaudited consolidated management accounts and are subject to change upon final audit and review by the company’s audit committee and external auditor.
• Results Announcement Timeline: The finalized annual results for FY2025 are expected to be published on or around 26 March 2026.

Details and Analysis

Huayu Expressway Group Limited has issued a profit warning to shareholders and potential investors, in compliance with the Hong Kong Stock Exchange requirements and the Inside Information Provisions under the Securities and Futures Ordinance.

The Board of Directors disclosed that the Group’s preliminary unaudited results for the financial year ending 31 December 2025 signal a material downturn in performance. Revenue is anticipated to contract by over 22% from the previous year’s figures. Even more concerning is the projected widening of net losses—potentially more than quadrupling year-on-year.

Driving Factors: The company has attributed these poor results primarily to the continued contraction in China’s consumer market, which has severely impacted the sales of wine and liquors, one of the Group’s key product segments. This structural challenge in consumer demand may have longer-term implications if the market does not recover.

Financial Reporting Status: Investors should note that the announced figures are based on management’s preliminary assessment and have not yet been audited or reviewed by the audit committee. Therefore, the final audited results may differ from the current estimates.

The company expects to finalize and publish its audited annual results around 26 March 2026. Shareholders are strongly advised to exercise caution when trading the company’s shares given the significant deterioration in financial performance and the uncertainties regarding the finalized results.

Board and Management

The Board comprises Mr. Chan Yeung Nam (Chairman), Mr. Fu Jie Pin, Ms. Liu Bao Hua, Mr. Zhang Tinghui (executive directors), and Mr. Chu Kin Wang (Peleus), Mr. Hu Lie Ge, and Mr. Lam Hon Kuen (independent non-executive directors).

Implications for Shareholders

• This profit warning is highly price-sensitive and could have a significant negative effect on the company’s share price upon market reaction.
• Investors should monitor updates from the company, especially the final annual results due in late March 2026.
• The significant decline in core sales and increased losses highlight ongoing operational risks related to the Chinese consumer market, which may persist in the medium term.

Shareholders and potential investors are urged to act with caution when dealing in the shares of Huayu Expressway Group Limited.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are based on the company’s preliminary estimates and are subject to change upon final audit. Investors are advised to rely on the company’s official announcements and audited financial statements before making any investment decisions.

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