JST GROUP (06687) issues profit warning, expected net loss of approximately 1.6 billion to 1.7 billion yuan in 2025, turning from profit to loss year-on-year.

JST GROUP (06687) announced that it is expected to achieve a net loss attributable to equity holders of the company of approximately RMB 1.6 billion to RMB 1.7 billion for the year ending December 31, 2025. This is in comparison to a net profit of approximately RMB 12.2 million for the year ending December 31, 2024, where the company has shifted from a net profit to a net loss. Based on the information available to the board of directors, they believe that the shift in the company's financial performance from net profit to a net loss for the year ending December 31, 2025 is primarily due to significant losses incurred from the issuance of convertible redeemable preferred shares. These preferred shares were issued by the company before its listing on the Stock Exchange of Hong Kong on October 21, 2025, and automatically converted to ordinary shares after the listing. The loss from preferred shares for the year ending December 31, 2025 is approximately RMB 1.77 billion, compared to approximately RMB 18.5 million for the year ending December 31, 2024, mainly due to changes in the fair value of the preferred shares post listing. The board of directors emphasized that the loss from preferred shares is a non-cash item and is not expected to have a significant adverse impact on the group's cash flow. Therefore, the company's business operations remain stable. However, based on the information available to the board of directors, it is expected that the group will achieve an adjusted net profit (based on non-International Financial Reporting Standard) of approximately RMB 180 million to RMB 230 million for the year ending December 31, 2025. The board believes that presenting adjusted net profit (Non-International Financial Reporting Standard measure) will help in comparing the operating performance of the company with different periods and other comparable companies in the industry by eliminating the potential impacts of certain items. The board defines adjusted net profit/(loss) (Non-International Financial Reporting Standard measure) as the net profit/(loss) for the year adjusted by adding back the following items: loss from preferred shares; share-based payments to employees; listing related expenses; foreign exchange losses/(gains); and fair value losses/(gains) on non-listed equity investments.