Leoch International Technology Limited Issues Profit Warning for FY2025

Key Points from the Profit Warning Announcement

• Expected Net Loss for FY2025: Leoch International Technology Limited (“Leoch” or “the Company”) has issued a profit warning, announcing that the Group expects to record a net loss attributable to shareholders of no more than approximately RMB300 million for the year ended 31 December 2025.
• Reversal from Profit to Loss: This marks a significant turnaround from the previous year, when the Company was profitable.
• Significant Decline in Profitability: In the first half of 2025, profit attributable to the owners of the parent decreased by roughly 61.7% year-on-year, setting the stage for the full-year loss.

Details and Factors Contributing to the Loss

1. US Import Tariffs:
   • Since Q2 2025, the US Government has imposed additional global import tariffs.
   • This has resulted in significant changes to Leoch’s order structure and a notable rise in export costs for shipments to the United States.
2. Quality Upgrading and Capacity Expansion:
   • In 2025, Leoch initiated a phase of quality improvements and expansion of production capacity.
   • The simultaneous launch of new products and commissioning of new production lines led to increased raw material consumption and higher unit production costs compared to the prior year.
3. Profit Decline in H1 2025:
   • The Group’s profit attributable to shareholders dropped by approximately 61.7% year-on-year in the first half of 2025, which contributed to the significant downturn in the full-year performance.

Important Information for Shareholders and Investors

• Price-Sensitive Information:
  • The expected swing to a net loss and the magnitude of the anticipated shortfall (up to RMB300 million) is considered material and may have a significant impact on the Company’s share price.
  • The causes of this loss—especially increased costs due to US tariffs and higher production costs from expansion—could have lingering effects on the Company’s future profitability if they persist.
• Pending Final Results: The figures provided are based on preliminary unaudited management accounts and internal assessment. Investors should note that these numbers have not been reviewed by the Company’s auditors nor the Audit Committee. The official audited annual results are expected to be published on or before 31 March 2026.
• Caution Advised: Shareholders and potential investors are urged to exercise caution when dealing in the Company’s shares in light of this announcement and to review the official results when released.

Board of Directors

The Board comprises Dr. DONG Li (Chairman and Executive Director), Mr. WU Kouyue (Executive Director), Ms. HONG Yu (Executive Director), and three Independent Non-Executive Directors: Mr. CAO Yixiong Alan, Mr. LAU Chi Kit, and Mr. LU Zhiqiang.

Conclusion

This profit warning from Leoch International Technology Limited is a significant development for shareholders and investors. The shift from profit to a potential loss of RMB300 million for 2025, driven by external macroeconomic factors and internal strategic initiatives, represents a major change in the Company’s financial health and could materially impact the share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are urged to conduct their own due diligence and consult professional advisors before making investment decisions. The information is based on a preliminary announcement by Leoch International Technology Limited and may be subject to change upon release of the audited annual results.

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