Kam Hing International Issues Profit Warning for FY2025

Significant Net Loss Expected; Operational Restructuring Underway

Kam Hing International Holdings Limited (Stock Code: 02307) has issued a profit warning, alerting investors and shareholders to a significant shift in its financial performance for the fiscal year ending 31 December 2025 (FY2025).

Key Points from the Announcement

• Expected Net Loss: The Group is projecting a net loss attributable to owners in the range of HK\$95 million to HK\$115 million for FY2025. This marks a substantial downturn compared to a net profit of approximately HK\$28.2 million reported for the previous year, FY2024.
• Reasons for the Loss:
  1. Decrease in Gross Profit Margin: The Group has experienced a decline in gross profitability, which has directly impacted overall earnings.
  2. One-off Loss on Disposal of Equipment: A significant contributing factor is a one-off loss arising from the disposal of equipment due to the shutdown of the Group’s power plant facility in Panyu.
  3. Redundancy Expenses: The Group has incurred one-off staff redundancy expenses as part of a manpower streamlining initiative in its Panyu operations.
• Unaudited Preliminary Figures: The information is based on preliminary unaudited management accounts and may be subject to change following audit and review processes.
• Upcoming Results Announcement: The official audited annual results for FY2025 are expected to be released by the end of March 2026.

Potential Impact on Shareholders

• Price Sensitivity: The announcement of a substantial forecasted loss, especially following a profitable prior year, is highly price-sensitive and may have a significant negative impact on the Company’s share price.
• Operational Restructuring: The shutdown of a key power plant and workforce streamlining could indicate broader operational challenges and potential strategic shifts within the Group.
• One-off Items: Investors should note that while some losses are one-off in nature (equipment disposal and redundancy), the ongoing decrease in gross profit margin could reflect longer-term industry or company-specific pressures.
• Exercise Caution: The Board has formally advised shareholders and potential investors to exercise caution when dealing in the Company’s shares in light of these developments.

Board Composition

As of the date of the announcement, the Board consists of the following members:

• Executive Directors: Mr. Tai Chin Chun (Chairman), Mr. Tai Chin Wen, Ms. Cheung So Wan, Ms. Wong Siu Yuk
• Independent Non-Executive Directors: Mr. Ho Gilbert Chi Hang, Mr. Ting Kay Loong, Mr. Wu Tak Lung

Conclusion

The profit warning underscores a challenging year ahead for Kam Hing International, marked by operational downsizing and significant one-off financial costs. While the Company suggests that some losses are non-recurring, the decrease in gross profit margin warrants close monitoring. Investors should stay updated on further disclosures, particularly the audited results expected in March 2026, and remain vigilant in light of the heightened risk and volatility surrounding the Company’s shares.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research and consult with professional advisors before making any investment decisions. The information provided is based on preliminary unaudited data and may be subject to adjustment.

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