Tesson Holdings Limited FY2025 Annual Report: Key Highlights and Investor Insights

Executive Summary

Tesson Holdings Limited (Stock Code: 1201) has published its annual report for the year ended 31 December 2025. The Group operates primarily in the Lithium Ion Motive Battery Business, including battery modules, charging devices, materials machines, new energy solutions, and recently, the Charging Station Business in Hong Kong. This article summarizes the most significant financial and operational updates, with a focus on developments that are likely to impact investor sentiment and the company’s share price.

Key Financial Highlights

• Net Loss Substantially Narrowed: The Group reported a loss of HK\$51.6 million for FY2025, a significant improvement from the HK\$163.6 million loss in FY2024. Loss attributable to shareholders also fell to HK\$26.0 million from HK\$142.9 million last year.
• Revenue Decline: Revenue dropped by more than 50% to HK\$29.7 million (FY2024: HK\$66.7 million) due mainly to lower sales volumes in the Lithium Ion Motive Battery Business, impacted by the US-China trade war and overcapacity in the PRC market.
• Improved Cost Discipline: Administrative expenses were cut sharply from HK\$129.5 million to HK\$49.2 million, driven by a reduction in depreciation, research and development expenses, and staff salaries. Finance costs were also reduced due to the settlement of borrowings.
• Gross Profit Marginally Improved: Despite the revenue fall, gross profit improved due to lower depreciation following the full write-down of some assets and tight cost controls.
• Balance Sheet Developments: As at 31 December 2025, the Group’s net assets stood at HK\$133.0 million, up from HK\$112.9 million a year ago. The Group’s gearing ratio improved, with no outstanding borrowings at year end and cash balances rising to HK\$16.3 million (from HK\$9.6 million).
• Share Capital Changes: The Company completed two share subscription exercises, raising a total of approximately HK\$74.1 million (after expenses) and increasing the share base from 219.7 million shares to 369.7 million shares as of January 2026.

Operational and Strategic Highlights

• Impact of US-China Trade War: The ongoing trade tensions have led to a cautious approach by customers and downstream partners, reducing orders and revenue in the battery business. Overcapacity and the phase-out of government subsidies in the PRC contributed to aggressive price competition and weaker demand.
• Business Diversification into EV Charging Stations: To mitigate risks, the Group has accelerated its expansion into the EV Charging Station Business in Hong Kong, capitalizing on government incentives and the rapid growth of the local EV fleet. The Group plans to deploy high-speed EV charging piles with photovoltaic storage and battery checking systems to improve user experience.
• Cost Optimization and Asset Review: The Group implemented cost controls and benefited from lower depreciation after fully writing down certain machinery. It is also evaluating options (disposal, leasing, or auction) for industrial land in Lishui, Nanjing.
• Legal Settlement: The Company reached a settlement with Hai Xia Finance Holdings Limited over a longstanding loan dispute. The Company agreed to pay HK\$30 million in three instalments during 2026, after already making a partial payment of HK\$23 million in 2025. The litigation will be discontinued upon completion of these payments.
• Ongoing Capital Management: The Group proactively raised new equity via two share subscriptions. Notably, the first subscription involved connected persons (Double Key, the Chairman, and a new executive Director), raising HK\$49.4 million. The second, completed post-year-end, raised HK\$24.7 million, with part of the proceeds earmarked for further investment in EV charging infrastructure.
• Dividends: No dividend was declared for FY2025, reflecting the Group’s focus on reinvestment and financial prudence.

Corporate Governance and Shareholder Matters

• Board Restructuring and Diversity: The Company is actively seeking to appoint additional independent non-executive directors and enhance gender diversity, with a target to restructure the Board and its committees by 12 May 2026.
• Shareholder Rights: Procedures are in place for shareholders to requisition special meetings and put forward proposals, ensuring robust corporate governance.
• Major Customers and Suppliers: The five largest customers accounted for 79.3% of revenue, and the five largest suppliers provided 99% of purchases, indicating a significant concentration risk.
• Litigation and Contingencies: No material contingent liabilities were reported at year end. The settlement of the loan dispute with Hai Xia Finance is a key risk mitigated.

Outlook and Potential Share Price Catalysts

• Turnaround Potential: The narrowing loss, improved cost structure, and business diversification efforts position the Group for a potential recovery, especially if market conditions for lithium batteries improve or the EV charging business scales up successfully.
• Strategic Expansion: Successful execution of the EV charging station rollout and adoption of new technologies (e.g., photovoltaic storage and battery checking) could unlock new revenue streams and boost investor confidence.
• Resolution of Legal Uncertainties: The settlement of significant litigation removes a major overhang and provides greater visibility over future cash flows.
• Capital Strengthening: The recent successful fundraisings have bolstered liquidity and demonstrate the confidence of major shareholders and new investors.
• Risks: The Group remains exposed to external risks such as PRC market overcapacity, trade frictions, and high customer/supplier concentration.

Conclusion

Tesson Holdings Limited’s FY2025 annual report reveals a company in transition—managing through sector headwinds while strategically repositioning for growth in the EV charging infrastructure sector. The mitigation of legacy legal and financial risks, coupled with strengthened capital and cost discipline, could provide positive catalysts for the share price, provided execution risks are well managed and the Group delivers on its growth roadmap.

Disclaimer: The above article is a summary and interpretation of Tesson Holdings Limited’s FY2025 annual report and is intended for informational purposes only. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The author and publisher accept no liability for any losses arising from reliance on this article.

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