China Treasures New Materials Group Ltd. Issues Profit Warning: Significant Drop in FY2025 Profit Expected

Key Points from the Announcement

• Profit Warning Issued: The Board of China Treasures New Materials Group Ltd. announced a pending significant decline in net profit for the financial year ended 31 December 2025 (FY2025).
• Expected Net Profit: Net profit attributable to equity shareholders is expected to be not less than RMB28.0 million for FY2025, compared to approximately RMB111.2 million in FY2024. This represents a decrease of more than 74%.
• Reasons for Profit Decline:
  • Decreased gross profit due to reduced revenue, primarily from a decline in sales of biodegradable shopping bags and produce bag rolls.
  • Increased research and development (R&D) expenses in FY2025.
  • Absence of one-off lease payment refund (recorded in FY2024) related to the early termination of the Huizhou factory lease.
  • Absence of a one-off government grant (recorded in FY2024) connected to the Company’s successful listing on the Hong Kong Stock Exchange.
• Financials Not Yet Audited: The figures are based on preliminary unaudited management accounts and may be subject to change upon finalisation and audit.
• Publication Timeline: The audited results for FY2025 are expected to be published on 31 March 2026.

Important Information for Shareholders and Investors

• Price Sensitivity: The dramatic decrease in profit is a material event and may have a significant impact on the share price of China Treasures New Materials Group Ltd.
• Causes of Decline:
  • Core business segments (biodegradable shopping bags and produce bag rolls) are underperforming, which could indicate ongoing challenges in market demand or competitive pressures.
  • Rising R&D expenses, while potentially positive for future innovation, are weighing on current profitability.
  • FY2025 lacks the one-time financial boosts (lease refund, government grant) that helped FY2024 results, suggesting underlying earnings are weaker than the previous year.
• Caution Advised: Shareholders and potential investors are explicitly advised to exercise caution when dealing in the Company’s securities, given the uncertainty around the final results and the significant profit decline.
• Board Composition: The announcement was made by Chair and Executive Director Zhang Yuqiu, with a Board comprising both executive and independent non-executive directors.

Additional Details

• The announcement was made in compliance with Hong Kong Listing Rules and relevant provisions under the Securities and Futures Ordinance.
• The Company is incorporated in the Cayman Islands and listed under stock code 2439.
• The announcement date is 23 March 2026, and the headquarters is in Changchun, Jilin, PRC.

Potential Impact on Share Price

The news is highly price sensitive. A more than 74% drop in net profit, along with the loss of one-off income sources and increased R&D costs, signals underlying challenges in the Company’s core business and earnings quality. Investors should anticipate potential volatility in the share price as the market digests the implications of weaker profitability and uncertain prospects.

Disclaimer

This article is based on preliminary, unaudited information as disclosed by China Treasures New Materials Group Ltd. Investors should not rely solely on this report for investment decisions and are urged to review the Company’s audited financial statements when available. This news does not constitute investment advice. The Company’s actual results may differ materially from those discussed herein.

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