KLN (00636) announced its financial results for the year ended December 31, 2025. The group recorded revenue of HK$56.336 billion, a decrease of 3% year-on-year. Profit attributable to shareholders was HK$1.411 billion, an increase of 7% compared to the previous year. Basic earnings per share stood at HK$0.78. The board proposed a final dividend of 16 HK cents per share.
The integrated logistics business segment in Hong Kong saw a 7% decline in profit, attributed to market competition, shifts in consumer behavior, and more cautious spending by both tourists and local residents. In 2025, Hong Kong's retail and dining sectors remained weak, with consumers favoring more affordable and value-oriented brands. An increasing number of residents also traveled to the Greater Bay Area for lower-cost dining and shopping, further reducing local demand. Although the integrated logistics segment secured new clients and projects in construction, pharmaceuticals, and healthcare, the resulting growth was insufficient to offset the overall slowdown. The relocation of a major customer's operations to Qianhai, Shenzhen also negatively impacted performance.
In mainland China, economic conditions remained subdued, and consumer confidence stayed weak. Intensified industry competition, coupled with companies continuing to adopt "China plus one" strategies by shifting part or all of their supply chains away from the country, led to reduced domestic logistics activity. At the same time, consumer downgrading affected demand in sectors such as electronics, fashion apparel, and premium goods. To mitigate pressure on business performance, the group undertook restructuring and streamlining measures and implemented AI to optimize financial and operational processes, strengthening cost control. Despite these efforts, the integrated logistics segment in mainland China still recorded an 11% decline in profit.
In contrast, the integrated logistics business in other parts of Asia achieved a 23% increase in profit, becoming the primary growth driver in 2025. Uncertainty over tariffs and cost factors accelerated the shift of supply chain activities from mainland China to neighboring markets, particularly in South and Southeast Asia. Leveraging its established presence and strategic assets in the region, as well as benefiting from robust market growth and strong performance from KLN Seaport in Thailand, the group successfully captured new business opportunities.
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