EDA GROUP HLDGS (02505) issues a profit warning, expecting a net loss of approximately 12 million yuan for the year 2025.

EDA GROUP HLDGS (02505) announced that compared to the net profit of approximately RMB 47.1 million in the year 2024, the group expects to incur a net loss of approximately RMB 12 million for the year ending December 31, 2025. Compared to the adjusted net profit of approximately RMB 113.9 million in 2024 (adjusted for share-based compensation expenses related to stock options and other stock-based compensation plans), the group anticipates an adjusted net loss of approximately RMB 8.5 million during the reporting period. The main reasons for the above decline are as follows: (1) Overseas warehouse strategic investments: with the addition of new leased overseas warehouses in the second half of 2024 and 2025, these warehouses require a ramp-up period before becoming profitable. However, related costs have increased significantly, mainly due to the amortization of right-of-use assets and recognition of interest expenses on lease liabilities. The Board believes that this strategic investment will benefit the long-term sustainable development of the group; (2) Adjustments in tariff policies during the reporting period have increased market uncertainty and intensified industry competition, leading to a continuous decrease in order prices; (3) Rising overseas logistics and labor costs during the reporting period have resulted in a significant increase in the group's overall costs; (4) The group's provision for expected credit losses on accounts receivable has increased, mainly due to an extension in the aging of accounts receivable. The amount increased by approximately RMB 7.7 million compared to the same period in 2024.