Henan Jinma Energy Issues Profit Warning and Announces Major Impairment Loss for FY2025

Key Points from the Announcement

• Significant Loss Expected: Henan Jinma Energy Company Limited anticipates recording a substantial net loss of approximately RMB527 million for the financial year ended 31 December 2025. This follows a loss of about RMB346 million for the same period in 2024.
• Impairment Loss at Joint Venture: The primary driver behind this expected loss is a large impairment on property, plant, equipment, and intangible assets related to a joint venture in which the company holds a 70% equity interest. The joint venture has continued to incur losses, prompting a valuation that led to an impairment loss of around RMB508 million. Henan Jinma’s share of this impairment is approximately RMB356 million.
• Underlying Business Shows Improvement: Excluding the impairment loss from the joint venture, the company’s net loss for 2025 would have been around RMB171 million, which is an improvement of RMB175 million compared to 2024. This signals some improvement in the company’s core operations outside the troubled joint venture.
• Operational Response: To address ongoing risks and losses at the joint venture, the Board has resolved to implement a three-month protective production suspension starting in April 2026. During this period, a professional team will conduct a comprehensive review of the joint venture’s operational and financial issues, with the aim of formulating a business restructuring plan to protect shareholder interests.
• Pending Final Results: The figures provided are based on preliminary unaudited management accounts and are subject to audit and further adjustments. The final audited results for 2025 are expected to be published by the end of March 2026.

Price-Sensitive Information for Shareholders and Investors

• Significant Impairment and Loss Could Impact Share Price: The announcement of a RMB527 million loss, primarily due to an impairment at a core joint venture, is highly price-sensitive and may negatively affect investor sentiment and the company’s share price.
• Potential for Recovery Outside the JV: The improvement in underlying losses (excluding the JV impairment) may provide some positive outlook for the company’s remaining operations, but the overall headline loss is likely to dominate market reaction in the near term.
• Uncertainty Remains: The outcome of the three-month suspension and the subsequent restructuring plan for the joint venture is uncertain and represents a key risk and opportunity for the company and its shareholders. The company has committed to keeping shareholders updated on material developments.
• Exercise Caution: The Board specifically advises shareholders and potential investors to exercise caution when dealing in the company’s shares at this time.

Summary and Analysis

Henan Jinma Energy Company Limited has issued a profit warning, informing the market that it expects to record a significant net loss of approximately RMB527 million for the year ended 31 December 2025. This marks a notable deterioration compared to the RMB346 million loss reported in 2024. The loss is primarily driven by a major impairment loss of RMB508 million related to a joint venture (in which Henan Jinma owns a 70% stake) that has been persistently loss-making. The company’s share of this impairment is RMB356 million.

Operationally, excluding this exceptional impairment, the underlying result shows an improvement, with the expected net loss narrowing to RMB171 million, representing a positive swing of RMB175 million from the previous year. This suggests some stabilization or potential recovery in the group’s core business, but the impairment overshadows these improvements.

In response to the ongoing operational challenges at the joint venture, the Board is taking decisive action by imposing a three-month suspension of production starting in April 2026 and commissioning a professional review team to propose a restructuring plan. The outcome of this process will be critical to the group’s future performance and value, and shareholders will be kept informed as developments arise.

The reported figures are based on unaudited management accounts and are subject to further review and audit. The company’s full audited annual results will be released by the end of March 2026.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The information is based on preliminary disclosures by Henan Jinma Energy Company Limited and may be subject to change following audit and further updates from the company. Investors are strongly advised to exercise caution and consult their professional advisers before making any investment decisions regarding the company’s shares.

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