Ten Pao Group Holdings Limited 2025 Annual Report: In-Depth Analysis for Investors

Date: 20 March 2026

Stock Code: 1979.HK

Overview

Ten Pao Group Holdings Limited, a leading supplier of intelligent power supply solutions, has released its Annual Report for the year ended 31 December 2025. The report reveals a year of steady growth, strategic transformation, and continued focus on innovation, positioning the Group to benefit from ongoing macroeconomic and industry trends. This comprehensive analysis summarizes the financial performance, strategic initiatives, and key developments that current and prospective shareholders need to know.

Key Financial Highlights

• Revenue: HK\$5,558.6 million (up 3.2% YoY)
• Operating Profit: HK\$424.0 million (up 1.3% YoY)
• Profit Attributable to Shareholders: HK\$380.6 million (down 0.9% YoY)
• Gross Profit Margin: 18.2% (down from 19.5% YoY, -6.7%)
• Dividend: Final dividend of HK6.6 cents/share; total dividend for the year HK12.8 cents/share (payout ratio: 34.7%)
• Earnings per Share: HK36.9 cents (down 1.1% YoY)
• Gearing Ratio: Increased to 36.6% from 35.1%
• Return on Equity: 18.9% (down from 21.9% YoY, -13.7%)

Strategic and Operational Highlights

• Diversification and Product Expansion: The Group is actively expanding into high-growth areas such as artificial intelligence (AI), data centers, smart controllers (PCBA), and energy storage. R&D investments are being ramped up to develop next-generation power supply products for computing, data centers, charging piles, and new energy systems.
• Operational Efficiency: The Group has made continued investments in automation and intelligent manufacturing, including the full operation of the Huizhou Intelligent Manufacturing Industrial Park. Key upgrades include automated production lines, intelligent logistics and energy management, which are expected to improve production stability, quality control, and reduce reliance on manual labor.
• Green Initiatives: Ten Pao is aligning its operations with the national drive towards “New Quality Productive Forces”, making significant efforts in smart manufacturing and green, low-carbon development. The Group is developing green power products focused on energy storage, electric power tools, battery packs, battery swapping systems for two-wheeled vehicles, and fast-charging pile products.
• Global Market Expansion: The Group is exploring emerging markets, particularly in Belt and Road Initiative regions and Southeast Asia, aiming to diversify revenue streams and mitigate risks from changes such as the EU Carbon Border Adjustment Mechanism (carbon tax).
• Dividend Policy: The Board maintains a steady dividend approach, referencing a benchmark payout ratio of about 30% of annual net profits while aiming for stability in dividend per share. Shareholders are offered a scrip dividend option for the final dividend.

Segmental Performance

• Industrial Power Supply (Smart Chargers & Controllers):
  • Continues to be the core revenue driver, supported by growing demand for digital and computing power supplies.
  • Revenue from this segment increased, reflecting the Group’s technical strengths and long-term customer relationships.
• New Energy Business:
  • Revenue slightly decreased to HK\$942.7 million (from HK\$1,048.2 million), representing 17.0% of total revenue.
  • This was due to a strategic shift towards higher-margin products and customers, which improved profitability despite the revenue dip.
  • The Group is focusing on products essential to the global energy transition, such as home micro-energy storage and electric mobility solutions.
• Consumer Power Supplies:
  • Remains a stable contributor, with the Group leveraging its established market presence to maintain competitiveness.

Corporate Governance, Risk, and Shareholder Matters

• Corporate Governance: The Group remains compliant with the Corporate Governance Code, save for minor deviations, and has established robust risk management, internal control systems, whistleblowing, and anti-corruption policies.
• Financial Risk Management: The Group actively manages foreign exchange, price, credit, liquidity, and interest rate risks. Notably, the Group’s largest five customers account for 45% of trade receivables, and it uses export credit insurance to mitigate risks.
• Shareholder Structure and Float: As of 31 December 2025, the Group was in compliance with the public float requirement, with no pre-emptive rights in place.
• Share Option Scheme: A new 2025 Share Option Scheme was adopted, effective 16 June 2025, valid for 10 years, but no options have been granted yet.
• Major Customers and Suppliers: The largest customer accounted for 15.1% of turnover, and the top five for 59.8%. The largest supplier accounted for 2.8% of purchases, and the top five for 10.9%.

Potential Price-Sensitive and Shareholder-Relevant Information

• Dividend Increase and Scrip Option: The Board proposed a final dividend increase (HK6.6 cents per share, up from HK6.0 cents), and a scrip dividend alternative for shareholders, offering flexibility between cash and equity.
• Growth in Strategic Sectors: Aggressive expansion into AI, data centers, and green energy could unlock new growth avenues and may enhance future profitability and valuation.
• Operational Resilience: Despite a challenging macroeconomic environment and a slight drop in net profit, the Group maintained strong cash flows, a healthy balance sheet (total equity up to HK\$2.18 billion), and a prudent capital structure.
• Increased Gearing: Gearing ratio rose to 36.6% (from 35.1%), primarily due to higher borrowings, which investors should monitor for future leverage risk.
• Gross Margin Pressure: Gross profit margin declined to 18.2% (from 19.5%), reflecting competitive and cost pressures that may impact future earnings quality.
• Board Confidence: The Board remains optimistic about long-term growth, supported by ongoing innovation, manufacturing upgrades, and market diversification.
• New Share Option Scheme: While no options were granted in 2025, the scheme’s existence signals potential future equity-based incentives that could affect dilution and employee retention.

Outlook

The Group expects macroeconomic uncertainties to persist but believes its focus on high-growth, high-value sectors (AI, data centers, smart controllers, energy storage) and green manufacturing will enable it to maintain competitiveness and capture emerging opportunities. The management’s prudent dividend policy, strong cash flow, and commitment to innovation and market diversification position Ten Pao for continued growth.

Important Dates for Shareholders

• Annual General Meeting (AGM): Friday, 12 June 2026
• Closure of Register for AGM: 9 June 2026 to 12 June 2026 (both days inclusive)
• Closure of Register for Dividend: 24 June 2026 to 26 June 2026 (both days inclusive)
• Ex-dividend Date: Monday, 22 June 2026
• Dividend Payment (Scrip/Cash): Expected on Monday, 17 August 2026

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research and consult professional advisors before making investment decisions. The information provided is based on the 2025 Annual Report of Ten Pao Group Holdings Limited and is believed to be accurate as of the date of publication, but no guarantee is made as to its completeness or accuracy. Share prices and dividends are subject to change and past performance is not indicative of future results.

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