Zhengye International Holdings Issues Significant Profit Warning for FY2025

Key Highlights

• Expected Profit Drop: Zhengye International Holdings Company Limited is forecasting a sharp decline in profit attributable to owners for the year ended 31 December 2025. The anticipated profit is in the range of RMB12 million to RMB16 million, compared to RMB36.4 million in 2024.
• Main Causes of Profit Decline:
  • Decreased orders from home appliance customers in the packaging business, driven by uncertainties related to trade policies and tariffs.
  • Expansion into new packaging business lines led to additional equipment investments and higher depreciation expenses.
  • Despite a reduction in the cost of base paper, overall gross profit in the paper-based packaging business declined year-on-year.
  • Gross profit from the Group’s paper manufacturing business increased, but not enough to offset the drop in packaging business profits, resulting in an overall decrease in the Group’s gross profit.
• Upcoming Results Announcement: The final annual results for FY2025 are expected to be released by the end of March 2026.

Details For Investors and Shareholders

Zhengye International Holdings has issued this profit warning to comply with the Hong Kong Stock Exchange’s disclosure requirements. The Board of Directors wants to ensure that all shareholders and potential investors are fully informed of the expected financial performance for FY2025.

The preliminary review, based on unaudited management accounts, shows the Group’s net profit will see a year-on-year decrease of over 55%. The main reason is a significant downturn in the paper-based packaging business, which has been challenged by reduced demand from existing customers due to ongoing uncertainties in global trade policies and tariffs. Additionally, the Group’s strategic move to expand into new lines has required substantial capital expenditure, further pressuring profitability through increased depreciation costs.

The paper manufacturing business performed better compared to the previous year, with improved gross profit. However, this improvement was not sufficient to counterbalance the reduced profits in the packaging segment.

All figures in this profit warning are preliminary and have not yet been audited or reviewed by the Company’s auditors or its audit committee. The final numbers may be subject to change.

Potential Price Sensitive Information

• This announcement signals a material decline in earnings, which may impact market confidence and could have a direct effect on the Company’s share price.
• Investors should monitor the release of the audited annual results, expected by the end of March 2026, for the most accurate financial picture.
• Shareholders and potential investors are strongly advised to exercise caution when dealing in the securities of the Company until further updates are provided.

Board Composition and Statement

The announcement was authorized by the Board of Directors, which includes key executive, non-executive, and independent non-executive directors. The statement reaffirmed the Company’s commitment to transparency and timely disclosure.

• Chairman: Hu Zheng
• Other executive directors include Mr. Hu Hancheng, Mr. Hu Hanchao, Mr. Hu Jianpeng, and Ms. Chen Wei. Non-executive and independent non-executive directors are also named.

Conclusion

This profit warning is a significant development for Zhengye International Holdings and its shareholders. The combination of weaker demand, rising costs, and strategic investments will weigh heavily on the Group’s profitability for FY2025. The situation warrants close attention from all stakeholders, as it is likely to influence share price performance in the near term.

Disclaimer: This article is intended for informational purposes only and does not constitute investment advice. All information is derived from Zhengye International Holdings’ public disclosures, which are subject to change. Investors should review the Company’s official financial results and consult with their own advisors before making any investment decisions.

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