Coolpad Group Limited Issues Profit Warning: Significant Reduction in Losses Expected for FY2025

Coolpad Group Limited (HKEx: 2369) has issued a profit warning, indicating a substantial narrowing of its net loss for the fiscal year ended 31 December 2025 (FY2025). The announcement, released on 13 March 2026, provides key financial forecasts and important strategic developments that could impact shareholder value.

Key Highlights from the Report

• Expected Net Loss Reduction: The company anticipates a net loss attributable to shareholders of between HK\$105 million and HK\$125 million for FY2025, a marked improvement compared to a loss of approximately HK\$252 million in FY2024.
• Revenue and Gross Profit Decline: Despite the improvement in net loss, both revenue and gross profit are expected to decrease year-on-year:
  • Revenue: Down by approximately HK\$233 million compared to FY2024, mainly due to intensified competition in the smartphone market and the strategic discontinuation of loss-making and negative gross profit products.
  • Gross Profit: Down by approximately HK\$11 million, influenced by rental concessions granted to tenants in Shenzhen, aimed at fostering long-term cooperation and income stability.
• Administrative Expenses: These have been reduced by around HK\$55 million due to cost control, resource optimization, and stricter budgetary controls.
• Other Income and Gains: A significant increase of HK\$168 million is expected. This rise is attributed to gains from the disposal of the company’s investment in CLSK and income from transferring certain patent rights.

Strategic and Operational Developments

• Strategic Adjustments: The company has voluntarily ceased operations for certain unprofitable product lines. This move, while reducing revenue and gross profit in the short term, is intended to improve overall business efficiency and profitability.
• Rental Concessions: Coolpad has implemented rental concessions for tenants in Shenzhen properties to enhance tenant relationships and lay the groundwork for stable future income, reflecting a focus on sustainable development.

Important Information for Shareholders

• Potentially Price-Sensitive: The forecasted narrowing of losses—driven by cost reductions and asset disposals rather than core business growth—may influence investor sentiment and share price volatility.
• Preliminary Figures: The data provided are based on unaudited management accounts and may be subject to adjustment following audit review.
• Upcoming Results Announcement: Shareholders should pay close attention to the formal FY2025 results, expected to be published on or before 31 March 2026, for verified financial figures and further insight into the company’s performance outlook.

Board Composition

As of the announcement date, the board comprises two executive directors (Chen Jiajun and Ma Fei), two non-executive directors (Liang Rui and Xu Yibo), and three independent non-executive directors (Guo Jinghui, Wang Guan, and Cheuk Ho Kan).

Conclusion

Coolpad Group Limited is on track to significantly reduce its losses for FY2025, primarily through strategic cost controls and asset disposals. However, the decline in core revenue and gross profit signals ongoing challenges in its primary business operations. Investors should closely monitor the forthcoming annual results for further developments, as these factors may have a material impact on the company’s share value.

Disclaimer: This article is based on unaudited preliminary information provided by Coolpad Group Limited as disclosed in its public announcement. The final audited results may differ. Investors are advised to exercise caution and consult professional advice before making any investment decisions.

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