China Treasures New Materials FY2025 Net Profit Drops 73.8% as Revenue Contracts 37.8%

Bulletin Express03-31

China Treasures New Materials Group Ltd. (CH Treasures NM) reported that FY2025 net profit fell 73.8% year-on-year to RMB 29.45 million, pressured by softer consumer demand and order reductions from supermarket chains.

Revenue declined 37.8% to RMB 253.42 million. Biodegradable plastic products remained the core business, contributing 93.6% of sales (RMB 237.16 million), while non-biodegradable automobile plastic parts generated 6.4% (RMB 16.26 million).

Gross profit retreated 39.4% to RMB 98.26 million; gross margin edged down 1.0 ppt to 38.8%. Basic EPS slid to RMB 2.91 cents from RMB 11.12 cents. The Board proposed no dividend.

Operating expenses shifted notably: • Selling and distribution costs fell 33.3% to RMB 3.56 million. • Administrative and other operating expenses rose 45.7% to RMB 60.89 million, driven by a RMB 9.54 million increase in R&D spending to RMB 35.73 million and a RMB 4.64 million loss on asset disposals. • Finance costs dropped to RMB 1.03 million after capitalising RMB 7.62 million of interest tied to construction projects.

CAPITAL STRUCTURE AND CASH POSITION Capital expenditure surged to RMB 629.25 million, centred on a new 80,298 sq.m production base in Changchun. As a result, property, plant and equipment jumped to RMB 713.96 million (31 Dec 2024: RMB 121.23 million).

Net cash fell sharply to RMB 22.24 million (31 Dec 2024: RMB 422.71 million) while interest-bearing borrowings rose to RMB 266.58 million (31 Dec 2024: RMB 72.01 million). The gearing ratio increased to 45.2% from 12.9%.

BALANCE-SHEET MOVEMENTS • Inventories decreased 22.1% to RMB 17.28 million. • Trade receivables dropped 51.1% to RMB 55.95 million, reflecting lower sales. • Trade payables fell 75.4% to RMB 10.20 million.

OUTLOOK AND EVENTS Management cited continued government support for biodegradable materials and the completed Changchun plant as future growth drivers. All IPO proceeds of HK$155.39 million have been fully deployed, chiefly funding the new facility and production line expansion.

No material post-balance-sheet events were reported.

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