Zhengye International Holdings Company Limited (ZHENGYE INT'L, 03363.HK) released a profit warning on 16 March 2026, indicating a sharp downturn in full-year profitability for the 12 months ended 31 December 2025.

The Group estimates profit attributable to owners at approximately RMB12.00 million–RMB16.00 million, compared with RMB36.40 million a year earlier. This translates into a year-on-year decline of about RMB20.40 million–RMB24.40 million, or roughly 56%-67%.

Management attributes the contraction mainly to:

1. Weaker demand from existing home-appliance customers in the paper-based packaging segment amid trade-policy and tariff uncertainties. 2. Additional capital expenditure and higher depreciation linked to new packaging production lines, which further compressed segment margins. 3. Although input costs for base paper eased during the period and gross profit in the paper manufacturing segment improved, the uplift was insufficient to offset the deterioration in packaging profitability, resulting in an overall gross-profit decline.

The preliminary figures are derived from unaudited management accounts and may be adjusted. Final audited results are scheduled for release by the end of March 2026.

The Board advises shareholders and potential investors to exercise caution when dealing in the Company’s securities.