Litu Holdings released its annual results for the year ended 31 December 2025, reporting a steep contraction in earnings against a backdrop of softer demand for cigarette packaging and a one-off disposal loss.
Revenue and Profitability • Revenue from continuing operations fell 23.3% year-on-year to HK$556.53 million, reflecting lower order intake for cigarette package printing amid industry-wide price pressure and intensified competition. • Gross profit dropped 42.7% to HK$101.31 million, pushing the gross margin down to 18.2% from 24.4% in 2024. • Profit attributable to shareholders plunged to HK$1.48 million (2024: HK$80.59 million). The earnings slide was driven by the revenue shortfall and a HK$32.52 million loss on the disposal of a 31% stake in associate Changde Gold Roc. • Basic earnings per share decreased to HK$0.001 from HK$0.051.
Cost and Expense Dynamics • Cost of sales eased 17.0% to HK$455.22 million, partially offsetting the revenue decline. • Selling and distribution expenses contracted 28.7% to HK$9.74 million, while administrative expenses fell 9.7% to HK$68.36 million as the Group streamlined its structure and reduced staff costs. • Finance costs rose 19.8% to HK$4.85 million owing to higher borrowing expenses.
Segment Performance • Printing and manufacturing of paper packages and related materials contributed HK$501.48 million, down 25.8%. • Leasing income from investment properties increased 10.6% to HK$55.05 million, supported by portfolio expansion. The printing business accounted for 90.1% of total revenue.
Balance Sheet and Liquidity • Cash and bank balances stood at HK$199.48 million (2024: HK$570.95 million); bank borrowings declined to HK$150.48 million (2024: HK$207.21 million), leaving the Group with net cash of HK$63.50 million. • Current and quick ratios moderated to 1.9-times and 1.8-times respectively (2024: 2.3-times and 2.2-times). • Net assets edged up 1.8% to HK$2.18 billion.
Capital Deployment and Corporate Actions • Investment properties almost tripled to HK$794.49 million after the HK$388 million acquisition of 86.67% of Kam Chung Building in Wan Chai and a HK$21.50 million industrial unit purchase in Wong Chuk Hang. • The sale of the Changde Gold Roc stake raised RMB142.50 million (approximately HK$155.06 million) but resulted in a disposal loss. • Capital commitments totalled HK$4.40 million, chiefly for an industrial park project.
Dividend The Board proposes a final dividend of HK2.6 cents per share, up 30% from the previous year’s HK2.0 cents, subject to shareholder approval. The payout of about HK$40.77 million is slated for 30 June 2026 to shareholders on record as of 8 June 2026.
Outlook Management anticipates continued headwinds in 2026 amid global economic uncertainty, industry competition and pricing pressure. Priorities include expanding tender participation, enhancing cost control, consolidating production resources, and maximising rental income from the enlarged property portfolio while exploring further asset optimisation opportunities.