Shenguan Holdings (Group) Limited released its audited results for the year ended 31 December 2025, revealing largely flat sales but a reversal to loss as margins compressed and provisions rose. Key highlights follow.

Revenue and Profitability • Revenue in 2025 inched up 0.6 % to RMB1.02 billion. • The Group reported a loss attributable to shareholders of RMB69.80 million, versus a profit of RMB26.66 million in 2024. • Gross profit fell 38.8 % to RMB104.73 million; gross margin slid to 10.2 % (2024: 16.8 %). Excluding inventory write-offs and provisions, margin stood at 14.8 %. • Inventory write-offs and provisions expanded to RMB46.39 million (2024: RMB21.0 million) amid efforts to clear legacy and trial products at discounted prices. • Other income and gains contracted 40.9 % to RMB34.08 million, chiefly on lower bank interest and government grants.

Cost and Expense Dynamics • Cost of sales rose 8.6 % to RMB918.54 million, outpacing revenue growth due to higher raw-material, energy and labour costs. • Selling and distribution expenses declined 8.0 % to RMB30.82 million (3.0 % of revenue). • Administrative expenses were flat at RMB131.72 million. • Finance costs decreased 8.4 % to RMB6.68 million, while income-tax expense more than doubled to RMB31.35 million, reflecting dividend withholding tax related to intra-group fund movements.

Balance Sheet and Cash Flow • Total assets slipped 2.3 % to RMB2.76 billion; shareholders’ equity fell to RMB2.13 billion. • Net cash outflow from operations narrowed to RMB88.50 million (2024: RMB143.30 million). • Cash, pledged deposits and time deposits totalled RMB555.35 million; interest-bearing bank borrowings rose to RMB400.20 million, leaving the Group in a net cash position of RMB155.15 million. Debt-to-equity stood at 19.1 %. • Working-capital metrics deteriorated: finished-goods inventory days lengthened to 262 (2024: 223.4) and raw-material days to 65.7 (2024: 61.1), while trade receivable days edged up to 62.2 and trade payable days to 78.0.

Operational Developments • Sales of collagen food, skincare and polymer collagen medical biomaterial products grew 44.1 %, with medical biomaterials showing notable volume and profit gains. • New collagen sausage-casing lines—centred on the “fried”, “crispy”, “fresh”, “tender”, “bright” and “colorful” series—captured more than 40 % of casing volume as customers migrated from legacy products. • Capital expenditure reached RMB28.80 million, focused on production-line upgrades; 2026 capex is budgeted at roughly RMB120.00 million.

Dividends No final or special dividends were proposed for 2025. The prior year carried a combined HK4.0 cents per share payout.

Outlook Management plans to boost high-end S-series casing capacity, strengthen supply-chain and quality controls, and accelerate commercialisation of collagen compound ingredients and medical biomaterials. Strategic priorities for 2026 include stabilising production, enhancing digitalisation, and expanding into health-related collagen applications while maintaining prudent cost and cash-flow management.