Xinchen China Power Holdings Issues Significant Profit Warning for FY2025

Xinchen China Power Holdings Limited (Stock Code: 1148) has issued a profit warning for the financial year ended 31 December 2025, signaling a substantial decline in profitability that is likely to be closely watched by investors and shareholders.

Key Highlights from the Announcement

• Sharp Decline in Profit: The company expects to record a profit attributable to equity shareholders of not more than RMB21.0 million for FY2025. This represents a significant decrease of approximately 45.0% compared to the profit for the year ended 31 December 2024.
• Cause of Profit Decline: The primary reason for this sharp drop is the absence of a one-time gain that occurred in 2024. In the previous year, the company recorded a substantial reversal of impairment loss amounting to approximately RMB88.2 million. However, no material reversal of impairment losses is expected for FY2025.
• Operating Expenses: The Group managed to reduce operating expenses during the period, but this improvement was insufficient to offset the absence of the significant one-off reversal benefit from 2024.
• Financials Not Yet Audited: The figures provided are based on a preliminary review of unaudited consolidated management accounts. The final audited results may differ from those currently disclosed.
• Expected Results Announcement: The company anticipates releasing its audited annual results for FY2025 in late March 2026.

Important Information for Shareholders and Investors

• Price Sensitive Information: The anticipated 45% profit drop is price sensitive and may have adverse effects on the company’s share price. Investors should take this into account when making trading decisions.
• Exercise Caution: The Board has specifically advised shareholders and potential investors to exercise caution when dealing in the company’s shares, given the material negative change in expected profit.
• One-Off Factors: The stark profit decline is primarily due to the absence of a one-off reversal of impairment loss that benefited FY2024’s results. This suggests that underlying operational performance improvements were not enough to counterbalance the loss of this extraordinary item.
• Board Composition: As of the announcement date, the Board comprises Mr. Zhang Wei (Chairman), Mr. Deng Han (Chief Executive Officer), Mr. Yang Ming (Non-Executive Director), and three independent non-executive directors: Mr. Chi Guohua, Mr. Wang Jun, and Ms. Dong Yan.

Conclusion

The profit warning issued by Xinchen China Power Holdings Limited is a material event that could significantly impact the company’s share price. The anticipated substantial decrease in profit, due to the absence of a one-off reversal of impairment loss, points to a need for investors to review their positions and risk exposure. The company’s reduction in operating expenses is a positive, but not enough to offset the loss of last year’s exceptional gain.

Shareholders and potential investors are urged to exercise caution and await the final audited results in March 2026 for a more comprehensive understanding of the company’s financial position.

Disclaimer: This article is based on the company’s official profit warning announcement and unaudited management accounts. The financial figures discussed are preliminary and may be subject to change after the completion of the annual audit. This article does not constitute investment advice. Investors should conduct their own due diligence or consult professional advisors before making investment decisions.

View POWER XINCHEN Historical chart here