HUABAO INTL (00336) Issues Profit Warning, Expects Pre-tax Loss of RMB 263 Million to 343 Million for FY 2025, a Decrease of 15% to 35% YoY

Stock News
Jan 28

HUABAO INTL (00336) announced that the Group expects to record a pre-tax loss ranging from RMB 263 million to RMB 343 million for the current financial year (the year ending December 31, 2025), which includes impairment provisions for goodwill and other assets, as well as other provisions. Compared to the pre-tax loss of approximately RMB 402 million in the same period last year, the expected loss is projected to decrease by about 15% to 35%. The pre-tax loss for the current year is primarily attributable to: share-based compensation expenses at the Company and its subsidiary level amounting to approximately RMB 98 million; and an estimated goodwill impairment loss of between RMB 470 million and RMB 530 million related to the cash-generating unit of Jiahao Food Co., Ltd. and its subsidiaries (Jiahao Food), which operates under the Company's condiments segment. Jiahao Food is primarily engaged in the production, sales, marketing, and distribution of condiments in China. Considering the continued downturn in China's catering industry and the fact that Jiahao Food's revenue and operating profit for 2025 have fallen short of management's expectations as of December 31, 2024, the Group has adopted a cautious forecast for Jiahao Food's future sales based on prudent and applicable accounting principles, leading to the above goodwill impairment estimate. This goodwill impairment is a preliminary assessment and may be subject to revision.

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