Huajin International Holdings Issues Significant Profit Warning for FY2025

Key Points from the Announcement

• Expected Large Net Loss: The Group anticipates a net loss attributable to owners of the Company ranging between RMB1,180.0 million and RMB1,280.0 million for the year ended 31 December 2025. This is a dramatic increase compared to the audited net loss of RMB91.2 million in 2024.
• Major Contributing Factors: Multiple issues have led to the expected loss, including weak market demand, intense competition, restricted exports, price cuts, and increased tariffs.
• Substantial Forfeiture of Commitment Fees and Deposits: The Group forfeited approximately RMB390.0 million due to failure to meet minimum offtake terms, further impacting results.
• High Raw Material Costs and Inability to Adjust Selling Prices: Elevated costs for materials, particularly hot-rolled coils, combined with unstable international trade, squeezed margins as the Group was unable to pass costs onto customers.
• Low Capacity Utilisation: The Group experienced significantly reduced output, leading to higher unit processing costs as fixed overheads were allocated across lower production volumes.
• Impairment and Write-Downs: The Group recognised impairment losses on fixed assets (RMB297.5 million), expected credit losses on trade and other receivables (RMB46.0 million), and inventory write-downs (RMB12.7 million).
• Business Model Adjustment: In response to risks from raw material price fluctuations and capital occupation, Huajin shifted its main operation model to “processing with supplied materials” in the second half of 2025. However, this transition period caused a reduction in revenue and further exacerbated losses.

Details Investors and Shareholders Must Know

• The scale of the anticipated loss for FY2025 is unprecedented for the Group and represents a major deterioration in financial performance.
• The loss is not solely due to market conditions; operational and strategic shifts, such as the forfeiture of significant deposits and fees, impairment losses, and the adoption of a new business model, have had major negative impacts.
• The results are preliminary and have not been reviewed by the audit committee or independent auditors. Finalised audited results may differ, but the magnitude of the losses is expected to remain substantial.
• The Group’s annual results for FY2025 will be published by the end of March 2026, and investors are strongly cautioned to monitor developments.
• There is a significant risk that these results may be price sensitive and could materially affect the Company’s share value, given the substantial increase in losses and the operational challenges highlighted.
• The announcement explicitly advises shareholders and potential investors to exercise caution when dealing in the shares of the Company.

Management and Board Composition

The announcement was signed by Chairman Xu Songqing. As of 26 March 2026, the Board comprises:

• Mr. Xu Songqing (Chairman)
• Mr. Chen Chunniu (Chief Executive Officer) – Executive Director
• Mr. Xu Jianhong – Non-executive Director
• Mr. Chan Oi Fat, Mr. Ou Qiyuan, Ms. Yip Nga Ting Cerin – Independent Non-executive Directors

Conclusion

The profit warning issued by Huajin International Holdings is highly material, with a projected net loss more than ten times greater than the previous year. The combination of adverse market conditions, operational challenges, and strategic shifts poses significant risks for shareholders. The announcement is clearly price sensitive and is likely to impact trading in the Company’s shares.

Disclaimer

The information contained in this article is based on the Company’s official announcement, which has not yet been reviewed or audited. Actual results may differ from the preliminary figures disclosed. Investors should exercise caution and consider seeking professional financial advice before making investment decisions related to Huajin International Holdings Limited.

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