X.J. Electrics (Hu Bei) Group Issues Significant Profit Warning for FY2025

Key Points from the Profit Warning Announcement

• Sharp Decline in Net Profit Expected:
  The Company anticipates its net profit for the year ended 31 December 2025 will fall within the range of RMB50 million to RMB53 million. This represents a substantial year-on-year decrease of approximately 62.3% to 64.4% compared to RMB140.43 million recorded in 2024.
• Multiple Adverse Factors Identified:
  The profit decline is attributed to several factors:
  • Weaker U.S. Market Demand: The global trade environment saw increased uncertainties in 2025, particularly due to escalating U.S. tariff policies. This led to a weakening in demand for small home appliances in the traditional U.S. market. Notably, Chinese exports of household electrical appliances dropped by 3.3% year-on-year to RMB688.85 billion, which negatively affected the Group’s total revenue.
  • Overseas Production Ramp-up Costs: The Company’s new production bases in Indonesia and Thailand began operations in 2025. However, as these facilities are still ramping up capacity and the local supply chains are incomplete, integrated production costs have risen, further impacting profitability. Management does expect long-term benefits from these investments as mass production commences and global supply chain stability improves.
  • Negative Change in Product Mix: Changes in the Group’s product mix during 2025 adversely affected overall gross profit margins.
  • Foreign Exchange Losses: The Company reversed from a foreign exchange gain in 2024 to a loss in 2025, further pressuring net profit for the period.
• Preliminary and Unaudited Figures: The profit guidance is based on preliminary, unaudited consolidated management accounts and may be subject to finalization and further adjustment.
• Disclosure Timeline: Detailed annual results are expected to be published by the end of March 2026.

Important Considerations for Shareholders

• Price-Sensitive Information: The dramatic expected decline in net profit is highly price-sensitive and could materially affect the valuation of X.J. Electrics (Hu Bei) Group’s shares.
• Strategic Overseas Expansion: While near-term costs from new overseas production bases are a drag on profitability, management maintains that these investments will benefit long-term competitiveness and supply chain resilience.
• Market Volatility Risks: Fluctuations in foreign exchange rates and global trade policies remain significant risks to earnings and should be monitored closely by investors.
• Caution Urged: The Board advises shareholders and potential investors to exercise caution when dealing in the Company’s shares pending further announcements.

Executive Commentary

The announcement, signed by Chairman and Executive Director Pan Yun, outlines the Company’s challenges and strategic adaptations amid a volatile global environment. The Board consists of several executive and independent non-executive directors, all of whom are actively involved in oversight as the Company navigates these headwinds.

Outlook

While 2025 is expected to be a challenging year, the Company’s ongoing overseas expansion and eventual ramp-up of production capacity may position it for improved performance in subsequent years. Shareholders should, however, be prepared for volatility and potential further adjustments as audited results are finalized.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should refer to the Company’s official communications and consult with professional advisers before making investment decisions. The actual results for the year ended 31 December 2025 may differ from the preliminary figures and are subject to further review and audit.

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