Nanjing Sample Technology Issues Profit Warning for 2025, Announces Significant Reduction in Expected Losses

Key Highlights

• Profit Warning for FY2025: Nanjing Sample Technology Co., Limited (“the Company”) has issued a profit warning, projecting a net loss attributable to shareholders of approximately RMB 60 million to RMB 80 million for the year ended 31 December 2025.
• Significant Narrowing of Losses: This represents a marked improvement compared to the net loss of RMB 420 million recorded in 2024, indicating a substantial narrowing of the Group’s losses year-on-year.
• Continuation of Loss-Making Position: Despite the improvement, the Group is expected to remain in a loss-making position for 2025 due to challenging macroeconomic conditions, intensified industry competition, and continued rise in raw material costs, all contributing to declining gross profit margins.
• Major Reduction in Asset Impairment and Provision Expenses: The narrowing of losses is primarily attributed to a significant reduction in asset impairment and provision expenses. In 2024, the Company made a one-off provision of approximately RMB 157 million for a litigation case.
• Change in Accounting Estimates: The Company’s Board has approved changes to accounting estimates, expected to reduce the 2025 net loss by about RMB 146 million. The key details include adjustments to bad debt provision ratios for accounts receivables and contract assets.

Details for Shareholders and Potential Investors

The following are important details that shareholders and potential investors should be aware of, which are likely to be price sensitive:

• Adjusted Bad Debt Provision Ratios: The Company, referencing industry peers, has modified its bad debt provision policies as follows:
  • Accounts receivables and contract assets aged 2-3 years: Provision ratio reduced from 30% to 20%.
  • Accounts and assets aged 3-4 years: Provision ratio lowered from 100% to 40%.
  • Accounts and assets aged 4-5 years: Provision ratio reduced from 100% to 60%.

  These changes are applied prospectively and will not affect previously published financial results.

• Effect of Accounting Estimate Changes: The change in estimates is anticipated to decrease the net loss for 2025 by approximately RMB 146 million, providing a notable boost to the bottom line.
• Ongoing Risks: Despite the reduction in projected losses, the Group remains exposed to macroeconomic challenges, competitive pressures, and high raw material procurement costs, all of which continue to affect profit margins.
• Results Subject to Final Audit: The 2025 results are based on preliminary unaudited management accounts. The final audited figures, which may differ, are scheduled for release by the end of March 2026.
• Share Price Sensitivity: The significant reduction in expected losses, combined with the change in accounting policy, could impact investor sentiment and potentially move the Company’s share price. However, the Company remains loss-making, and investors should remain cautious.

Board Statement and Corporate Governance

The announcement was authorized by the Board of Directors, chaired by Mr. Liu Fei. The Board includes executive directors Mr. Liu Fei (Chairman), Mr. Ma Fengkui, and Mr. Liu Min; non-executive director Mr. Zhang Chengji; and independent non-executive directors Mr. Zhang Bin, Ms. Xu Gaoyan, and Ms. Chung Yuet Mei.

Investors are advised to closely monitor the forthcoming audited annual results and exercise caution when trading the Company’s shares.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should review the Company’s official audited results and consult their financial advisors before making investment decisions. The information herein is based on preliminary unaudited results and may be subject to change.

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