Shengli Oil & Gas Pipe Holdings Limited Issues Profit Warning: Significant Reduction in Loss for FY2025

Key Highlights

• The Group expects a notable reduction in its loss for the year ended 31 December 2025 (FY2025).
• Estimated loss attributable to owners of the Company for FY2025 is no more than RMB20.00 million, a sharp improvement from RMB42.56 million in FY2024.
• Total comprehensive loss for FY2025 is expected to be no more than RMB50.00 million, compared to RMB77.21 million in FY2024.

Details of Financial Performance

Shengli Oil & Gas Pipe Holdings Limited has announced a significant reduction in its expected losses for FY2025, based on preliminary unaudited consolidated management accounts. The improvement is driven primarily by increased sales volumes in both pipe products and national pipeline and anti-corrosion processing services, which carry higher gross margins. Gross profit is expected to surge to approximately RMB108.7 million for FY2025, up from RMB59.1 million in FY2024. Additionally, the Group’s share of profit from an associate is anticipated to rise from RMB14.6 million in FY2024 to RMB18.4 million in FY2025.

Factors Contributing to Financial Results

1. Sales Growth: The Group reported substantial growth in sales volume for its pipe business, particularly in the segments with higher gross margins. This is a key driver for the improved gross profit figures.
2. Administrative Expenses: Despite the positive gross profit trend, administrative expenses increased by approximately RMB9.3 million, reaching RMB87.6 million in FY2025. The increase is attributed to higher R&D investment and a one-off litigation provision of RMB19.0 million recognized in profit or loss for the year.
3. Litigation Provision: The one-off litigation provision is a noteworthy item and may be considered price sensitive. It has impacted the profit figures but was partially offset by the growth in gross profit.

Potential Share Price Impact

Investors should note that the expected reduction in losses and improvement in gross profit are positive signals for the Company’s future prospects. However, the increase in administrative expenses and the recognition of a significant litigation provision could temper the positive impact. The news is considered price sensitive and may affect the share value, especially as it signals a turnaround in the Company’s financial performance, with losses being nearly halved compared to the previous year.

Upcoming Developments

The Company is currently finalizing its annual results for FY2025, with the results announcement expected before the end of March 2026. The figures disclosed are based on unaudited accounts and may be subject to further adjustments.

Board and Management

The Board of Directors consists of Executive Directors Mr. Wei Jun, Mr. Zhang Bizhuang, Mr. Wang Kunxian, and Ms. Han Aizhi; Non-executive Director Mr. Huang Xingwang; and Independent Non-executive Directors Mr. Chen Junzhu, Mr. Qi Defu, and Mr. Qiao Jianmin.

Important Notice to Shareholders and Investors

Shareholders and potential investors are advised to exercise caution when dealing in shares of Shengli Oil & Gas Pipe Holdings Limited, as the financial results have not yet been audited or reviewed by the audit committee.

Disclaimer

The information provided in this article is based on preliminary unaudited management accounts and may be subject to change. Investors should not rely solely on this report for investment decisions and are encouraged to await the final audited results and official announcements from Shengli Oil & Gas Pipe Holdings Limited.

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