Linklogis Inc. 2025 Annual Report: Key Insights for Investors

Executive Summary

Linklogis Inc. has released its 2025 Annual Report, revealing a year of transformation, strategic refocus, and significant financial developments. The company made bold moves in international expansion, technology innovation, and sustainability, while continuing to address challenges in profitability and risk management. Investors should pay close attention to the company’s progress toward sustainable profitability, the dividend announcement, share repurchase activities, and its evolving business model, as these could have direct implications on the share price.

Key Financial Highlights

• Revenue and Income: RMB 982.7 million, down 4.7% YoY, reflecting strategic restructuring and divestment of non-core business lines.
• Gross Profit: RMB 532.8 million, down 25.7% YoY, with gross margin dropping from 69.6% to 54.2% due to competitive pricing and revenue structure optimization.
• Net Loss: Attributable to equity shareholders was RMB 438.9 million, a significant improvement from RMB 835.4 million in 2024 (down 47.5%). Adjusted non-IFRS loss was RMB 452.9 million, also improved.
• Strong Second Half: Revenue and income in H2 2025 increased by 62% compared to H1, indicating successful turnaround in core businesses.

Strategic and Operational Developments

• International Expansion: 2025 marked a pivotal year as Linklogis launched “Unloq,” a comprehensive rebranding for its international business. The new “SC+ Platform” leverages cloud-native technologies and smart contracts to connect real-world trade with digital finance, including compliant stablecoins. This initiative targets systemic challenges in cross-border trade, such as credit verification and settlement efficiency.
• Technology Innovation: The company is focusing on artificial intelligence (AI) and blockchain as core drivers, actively upgrading intelligent evaluation models, green pricing mechanisms, and carbon footprint accounting frameworks to embed ESG principles into its offerings.
• Sustainable and Inclusive Finance: Linklogis provided digital inclusive finance technology services to over 430,000 SMEs, with an average financing cost of just 2.85%. The company’s digital platforms prioritize assets with green, low-carbon, and high social impact.
• Green Asset Securitization: The company completed its first green-industry data asset-backed securities (ABS) project, diversifying asset types and product structures, and laying groundwork for an integrated industry-data-finance ecosystem.

Shareholder-Focused Actions

• Dividend Announcement: The Board has recommended a special final dividend of HKD 0.06 per Share, payable July 17, 2026, despite losses in the reporting year. This signals the Board’s confidence in long-term growth and a resilient capital structure.
• Share Repurchase: In 2025, Linklogis repurchased 119.8 million Class B Shares for HKD 365 million (~USD 47 million), with 1.0 million shares cancelled and 118.7 million pending cancellation. The Board approved a new US\$80 million repurchase program over the next year, reflecting management’s belief in the intrinsic value of the shares.
• MSCI Inclusion: Linklogis was included in the MSCI China Small Cap Index, enhancing its appeal and visibility in capital markets.

Risk Factors and Uncertainties

• Credit Risk: Significant impairment losses (RMB 287.7 million) were recognized, mainly due to credit-impaired assets assessed under the discounted cash flow method. The company maintains robust risk management policies and data-driven credit assessment, but ongoing credit risks, customer concentration, and competitive pressure remain.
• Regulatory Risks: The company operates in highly regulated and rapidly evolving industries. Risks relating to contractual arrangements with PRC entities, regulatory changes, and enforceability of certain contracts could materially impact operations.
• Profitability Challenge: Linklogis has incurred losses for consecutive years, though losses were reduced in 2025. The Board is targeting a return to sustainable profitability in 2026 through prudent operations, asset quality improvement, and cost optimization.
• Weighted Voting Rights (WVR): Investors should note the WVR structure, where Class A Shares carry 10 votes each, potentially giving the WVR beneficiary significant influence over corporate decisions irrespective of economic interest. This could affect minority shareholder power and governance outcomes.

Other Corporate Highlights

• Corporate Governance: The Board conducted annual reviews of risk management, internal controls, and compliance, with no material weaknesses identified. Whistleblowing and anti-corruption policies are in place.
• Charitable Donations: RMB 48,000 donated in 2025, reflecting ongoing corporate responsibility.
• Capital Commitments: The company completed the acquisition of Bytter Technology, consolidating it as a subsidiary after settling the remaining consideration.
• No Material Litigation: No material litigation or arbitration pending against the Group in the reporting year.
• Use of IPO Proceeds: Of the RMB 7.5 billion raised in the 2021 IPO, RMB 947.8 million remains unutilized, earmarked mainly for technology enhancement and future strategic investments by December 2026.

Outlook and Guidance

Linklogis is transitioning from investment to monetization. For 2026, the company aims to:

• Enhance asset quality and optimize profitability structure
• Accelerate growth in both domestic and international markets, especially via asset-light, AI-powered strategies
• Continue cost reduction and operational efficiency improvements
• Return to sustainable profitability

Management’s strategic discipline and execution will be key for delivering long-term shareholder value.

Potential Price-Sensitive Events

• Dividend Declaration: Despite losses, the Board’s decision to pay a special dividend could positively impact share price, signaling confidence in future prospects.
• Share Repurchase: Ongoing buybacks and the new US\$80 million repurchase program may support share price and reduce float.
• MSCI Index Inclusion: May increase institutional interest and liquidity.
• International Expansion and Technology Initiatives: The launch of Unloq and the SC+ Platform, along with AI and blockchain-driven solutions, could drive growth and investor sentiment.
• Move toward Profitability: Significant reduction in net loss and guidance for sustainable profitability in 2026 may improve outlook.
• Regulatory and Credit Risks: Any material developments in regulatory compliance or credit impairment could affect the valuation and risk profile.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. Past performance is not indicative of future results. All financial data is as reported by Linklogis Inc. in its 2025 Annual Report.

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