Global Bio-chem Technology Group Issues Significant Profit Warning for FY2025

Key Points for Investors

• Profit Warning Issued: The Board of Global Bio-chem Technology Group Company Limited has issued a profit warning for the year ended 31 December 2025.
• Expected Net Gain Drop: The Group expects to report a net gain (before tax effect) in the range of approximately HK\$100.0 million to HK\$300.0 million for FY2025. This represents a dramatic decline compared to the net gain (before tax effect) of HK\$745.6 million recorded in FY2024.
• Revenue and Gross Profit Growth: Despite the expected drop in net gain, the Group anticipates an increase in revenue by about 13.9% to HK\$2,278.5 million and a rise in gross profit by 2.8% to HK\$196.4 million for FY2025.
• Gross Profit Margin Decline: The gross profit margin is projected to decrease to 8.6% from 9.5% in the previous year, reflecting margin pressure despite top-line growth.

Details and Factors Affecting Results

• Rising Operating Costs: The increase in domestic corn kernel prices since mid-2025 has significantly raised the Group’s operating costs, pressuring overall profitability.
• Market Oversupply from Anti-Dumping Actions: The European Union’s anti-dumping investigations into lysine imports from Mainland China have led to an oversupply of lysine in the domestic Chinese market, negatively impacting the Group’s gross profit margins.
• Absence of One-Off Gain: The previous year’s results were boosted by a one-off gain of HK\$1,962.1 million related to the disposal of eight subsidiaries, a gain not repeated in FY2025.

Shareholder Considerations & Price Sensitivity

• Material Decrease in Profitability: The sharp drop in anticipated net gain is a highly price-sensitive issue. Shareholders should note that the expected net profit for FY2025 is substantially lower than FY2024, largely due to one-off effects in the prior year and current-year operational challenges.
• Volatility Risk: The combined effect of increased input costs and adverse market dynamics could heighten volatility in the Company’s share price as the market digests these developments.
• Pending Audit Confirmation: The announcement is based on the preliminary unaudited management accounts. Final audited results may differ, and will be published by the end of March 2026.
• Investor Caution Advised: The Board specifically advises shareholders and potential investors to exercise caution when dealing in the Company’s shares, given the significant changes in profitability outlook and ongoing finalisation of results.

Corporate Governance Note

The Board comprises two executive directors (Mr. Wang Cheng and Mr. Wang Guicheng), one non-executive director (Mr. Li Yuewen), and three independent non-executive directors (Ms. Jiang Fangfang, Mr. Tan Chao, and Ms. Xie Liangqiu).

Conclusion

The profit warning issued by Global Bio-chem Technology Group is a material development. The expected sharp fall in net gain, despite higher revenues, is mainly due to increased costs and adverse market factors, compounded by the absence of last year’s one-off disposal gain. This announcement is likely to impact the Company’s share price and is highly relevant for all stakeholders.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should refer to the Company’s official final results announcement and consult their own advisors before making any investment decisions. The actual audited results may differ from the information presented here.

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