Chervon (2285) H2 2025 earnings summary

Executive summary

• Revenue declined 8.2% year-over-year to $1,628 million in 2025, mainly due to cautious procurement amid China-U.S. tariff tensions, but flagship brand EGO achieved double-digit POS growth in North America.

• Net profit dropped 13.3% to $98 million, with adjusted net profit down 42.2% due to non-recurring items.

• Gross profit margin decreased to 32.9%, attributed to higher costs from tariffs and lower production volume.

• Strong operating cash flow of $229 million, up 36.8% year-over-year, supported resilience and ongoing global manufacturing optimization.

• Special dividend of HK$1.1905 per share paid; final dividend proposed at HK$0.4469 per share.

Financial highlights

• Gross profit margin decreased to 32.9% from 34.7% year-over-year.

• Operating profit margin fell to 7.5% from 8.7% year-over-year.

• Earnings per share declined 13.6% to $0.19.

• Adjusted net profit margin dropped to 4.8% from 7.7% year-over-year.

• Cash and cash equivalents increased to $379 million at year-end 2025.

Outlook and guidance

• Management expects to resume sustainable growth in 2026, citing improved operational efficiency, diversified production capacity, and a rebound in order and shipment volumes in Q4 2025.

• Focus remains on global manufacturing optimization, innovation in lithium-ion and intelligent technologies, and enhancing shareholder returns.

• Strategic response includes continued R&D investment and controlled administrative expenses.