China Aluminum Cans Holdings Limited (Stock code: 6898)
Annual Results for the Year Ended 31 December 2025

Key Highlights

• Revenue: HK\$233.0 million, up 2.3% from 2024
• Net Profit: HK\$19.4 million, up 3.5% from 2024
• Final Dividend Proposed: HK0.20 cent per share (down from HK0.28 cent per share in 2024)
• Cash and Cash Equivalents: HK\$46.6 million, increased from HK\$30.6 million
• No Bank Borrowings: As of 31 December 2025, bank borrowings are nil
• Share Repurchase: 37,628,000 shares repurchased and cancelled in July 2025
• Capital Commitments: HK\$0.28 million for plant and machinery
• Unutilized IPO Proceeds: HK\$8.7 million remain for R&D laboratory, timeline extended to end-2026
• Workforce: 281 employees, up from 269 in 2024

Business Overview

China Aluminum Cans Holdings Limited is a leading manufacturer of monobloc aluminum aerosol cans used for personal care and pharmaceutical products. The Group offers over 50 models with diameters from 22mm to 66mm and heights from 58mm to 247mm, accommodating diverse customer needs. In 2025, the Group sold approximately 125.2 million cans, down slightly from 127.2 million in 2024.

Operating Environment and Outlook

The global economy in 2025 faced significant challenges: heightened geopolitical risks, slow growth, persistent inflation, and commodity price volatility. Domestically, weak demand and low consumer confidence weighed on operations. Despite these headwinds, the Group maintained growth by strengthening relationships with core customers, increasing order volume and cooperation scale. The Group expects continued fierce market competition—particularly from small-scale rivals—alongside persistent weak consumer demand and policy risks in the PRC.

Financial Review

Revenue

Total turnover was HK\$233.0 million, a 2.3% increase year-on-year. China (PRC) remains the dominant market, contributing HK\$208.1 million, with other regions (Africa, America, Asia) collectively making up the remainder.

Cost of Sales

Cost of sales rose to HK\$175.5 million, 75.3% of turnover, mainly due to higher aluminum ingot prices. Gross profit fell to HK\$57.4 million, with margins squeezed by raw material costs.

Other Income and Gains

Other income and gains fell 14% to HK\$9.6 million, despite higher scrap material sales, due to reduced investment gains and fair value changes.

Expenses

• Selling & Distribution: HK\$5.2 million (up 10.7%) due to increased exhibition and entertainment expenses.
• Administrative: HK\$22.8 million (down 10.9%), reflecting strict cost controls.
• R&D: HK\$11.2 million, consistent with 2024.

Net Profit

Net profit saw a 3.5% uptick to HK\$19.4 million. Net margin was 8.3%. The increase is attributed to higher sales, lower overheads, and strict cost controls, offset by increased raw material costs.

Balance Sheet and Liquidity

• Current Assets: HK\$120.1 million
• Current Ratio: 4.3 (was 5.4 in 2024)
• Cash and Cash Equivalents: HK\$46.6 million
• No Bank Borrowings: Down from HK\$53,000 in 2024; all borrowings denominated in RMB were repaid
• Unutilized Banking Facilities: HK\$138.6 million available
• Gearing Ratio: -16.8% (negative due to excess cash over debt)
• No Significant Contingent Liabilities:
• Capital Commitments: HK\$0.28 million for plant and machinery

Dividend and Capital Structure

• Final Dividend: HK0.20 cent per share (subject to AGM approval), lower than previous year’s HK0.28 cent
• Interim Dividend: HK0.15 cent per share
• Shares Issued: 944,047,000 (down from 956,675,000 due to repurchases and cancellation)
• Share Repurchase: 37,628,000 shares repurchased and cancelled in July 2025 at prices between HK\$0.76 and HK\$0.87 per share, totaling HK\$29.9 million. Repurchase rationale: Board believes shares are undervalued and repurchase increases shareholder value.
• Convertible Notes: 25,000,000 new shares issued via conversion

Use of IPO Proceeds

• Original IPO Net Proceeds: HK\$80.0 million
• R&D Laboratory: HK\$8.7 million unutilized, timeline extended to 31 December 2026; delay due to shift from pharmaceutical to cosmetic industry, requiring new materials R&D and technical verification
• All other IPO proceeds fully utilized

Operational and Risk Management

• Foreign Exchange Risk: 10% of revenue in US\$, 90% of costs in RMB; no hedging contracts in place, exposing Group to FX risks.
• Raw Material Hedging: Typically hedges aluminum ingot purchases, but no forward purchases were conducted in 2025.
• Employees: Workforce increased to 281; staff costs (excluding pensions) HK\$32.9 million.

Corporate Governance

• Chairman and CEO Roles: Both held by Mr. Lin Wan Tsang, contrary to HKEX Code; Board believes this is necessary for leadership and efficiency, with adequate checks via independent directors.
• Audit, Remuneration, Nomination, and Risk Committees: Fully established and functioning with majority independent directors.
• No significant post-reporting period events.
• No material acquisitions or disposals during 2025.

Shareholder Information

• Final Dividend Record Date: 9 June 2026; payment around 6 July 2026
• AGM Date: 22 May 2026
• Register Closure Dates: 18 May–22 May 2026 (AGM); 4 June–9 June 2026 (final dividend)

Potentially Price Sensitive Issues

• Dividend Cut: The reduction in final dividend may affect investor sentiment and share price negatively.
• Share Repurchase: Significant repurchase and cancellation of shares could strengthen share value by reducing supply and signaling confidence from the Board.
• Cash-rich Position: No borrowings and increased cash reserves may support future expansion, dividends, or acquisitions, potentially positive for share price.
• Delayed R&D Investment: Extended timeline for R&D laboratory may signal slower innovation, but also prudent capital deployment.
• Raw Material Cost Pressure: Margin pressure from rising aluminum prices could affect profitability and future dividends.
• FX Exposure: Lack of hedging for US\$/RMB mismatch leaves Group vulnerable to exchange rate fluctuations.

Conclusion

China Aluminum Cans Holdings Limited reported stable growth amidst a challenging macroeconomic backdrop. While revenue and profit rose slightly, cost pressures and a dividend cut are noteworthy. The Board’s confidence is demonstrated by significant share buybacks, but investors should monitor FX risk, margin pressure, and the pace of R&D deployment. These factors may influence share price performance in the near term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The author does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from reliance on this report.

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