Winox Holdings Limited Releases Challenging 2025 Annual Results – Key Points for Investors

Winox Holdings Limited (Stock Code: 6838), a leader in premium stainless steel products, has published its audited annual report for the year ended 31 December 2025. The results reflect a year of significant challenges, with several developments that are highly relevant for shareholders and may impact share value.

Key Financial Highlights

• Revenue fell sharply by 21.8% to HK\$533.3 million (2024: HK\$681.7 million).
• Gross profit dropped by 31.8% to HK\$74.6 million (2024: HK\$109.4 million).
• Loss for the year ballooned to HK\$61.5 million, a 202.4% increase from last year’s loss of HK\$20.3 million.
• Basic and diluted loss per share worsened to HK10.2 cents (2024: HK3.4 cents).
• No dividend was declared for 2025 (2024: Interim dividend HK0.5 cents).
• Total assets decreased to HK\$1,014.7 million (-13.3%).
• Net assets fell slightly to HK\$925.3 million (-1.8%).
• Gearing ratio improved to 0.02 (2024: 0.06) as total borrowings decreased sharply (-75.6%).
• Return on equity turned negative at -6.6% (2024: -2.2%).

Business Segment Performance

• Watch bracelets revenue: HK\$186.8 million (-2.0%).
• Mobile phone cases and parts: HK\$209.0 million (-31.3%).
• Smart wearable cases and parts: HK\$114.7 million (-27.0%).
• Fashion accessories: HK\$22.8 million (-22.8%).

The revenue mix shifted, with mobile phone cases and parts now representing the largest portion (39.2%), followed by watch bracelets (35%), smart wearable cases (21.5%), and fashion accessories (4.3%).

Management Commentary

Chairman Yiu Hon Ming stressed that 2025 was marked by a weak global consumer market, geopolitical turmoil (including the Russia-Ukraine conflict and US tariffs), and slow recovery in China. The luxury goods sector, where Winox’s products are ultimately sold, was particularly hard-hit. In response, Winox implemented workforce streamlining and cost reduction measures, paying HK\$12.45 million in employment termination compensation.

Shareholder Price Sensitive Issues

• Profit Warning & Dividends: The substantial increase in losses and the Board’s decision not to pay any interim or final dividend, citing capital preservation, are highly price sensitive and likely to impact share price negatively.
• Revenue Concentration: The top five customers accounted for 65% of total revenue (up from 56% in 2024). The largest customer alone contributed 32.7%. Loss of any major customer would have a significant impact.
• Risk Factors: The report highlights several ongoing risks:
  • Continued US-China tariff war and new sanctions.
  • Geopolitical instability in Europe and the Middle East.
  • Intense domestic competition in the PRC, especially in consumer electronics.
  • Slow economic recovery in China.
  • High customer concentration risk.
• Liquidity & Borrowings: Winox’s net current assets and cash position remain healthy. Bank borrowings fell to HK\$16.5 million (from HK\$67.8 million), all in Renminbi, and all borrowings are classified as current due to repayment on demand clauses.
• Cost Management: Significant reduction in selling, distribution, and R&D expenses, but administrative costs rose slightly due to streamlining costs.
• Connected Transactions: The group entered into a new lease for production premises with a related party, recognized as a one-off connected transaction under HKFRS 16. This was subject to reporting and announcement requirements under HKEX rules.
• Environmental & ESG Compliance: Winox maintains compliance with environmental regulations and publishes a separate ESG report annually. No material breaches of laws were reported.

Corporate Governance & Control

• Board Refreshment: Carson Wen retired as Independent Non-Executive Director in May 2025 to comply with HKEX rules on long-serving INEDs.
• Non-competition Undertaking: Major shareholders and directors provided written confirmations of compliance with the non-competition agreement.
• Internal Controls: The Board reviewed risk management and internal control systems and considered them effective and adequate.
• Public Float: The company maintained a sufficient public float (>25%) throughout 2025.

Five-Year Financial Trends

Outlook & Strategic Response

Management expects continued weakness in the luxury goods market, citing ongoing geopolitical risks and competition. The Group is focusing on enhancing operational efficiency, optimizing resource allocation, and diversifying its product portfolio to mitigate risks and ensure long-term sustainability.

Other Notable Points

• Charitable donations increased to HK\$271,000 (2024: HK\$175,000).
• Auditor Change: Deloitte Touche Tohmatsu was appointed as auditor during the year.
• Directors’ Shareholdings: Chairman Yiu Hon Ming and Law Wai Ping (spouse) together control 66.34% of the Company’s shares.

Conclusion – Investment Implications

The 2025 results of Winox Holdings Limited are highly relevant for investors. The sharp decline in revenue and profits, absence of dividends, heavy customer concentration, and challenging outlook for luxury goods all pose risks that may impact share price negatively. However, the company’s healthy cash and asset position, improved gearing, and commitment to cost controls and governance may provide some support. Investors should closely monitor developments in global trade, luxury markets, and any further changes in customer relationships or cost structure.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should conduct their own research and consult with qualified financial advisors before making any investment decisions. All information is based on the company’s published annual report for the year ended 31 December 2025 and may be subject to change.

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