Tan Chong International (693) H2 2025 earnings summary

Executive summary

• Revenue declined 5% year-over-year to HK$12.0 billion, with profit after tax down 48% to HK$318.1 million due to supply constraints, especially for the new Subaru Forester.

• EBITDA fell 18% to HK$1.45 billion, and operating profit margin decreased to 6.2% from 8.6%.

• Despite lower reported earnings, total comprehensive income surged 920% to HK$1.06 billion, driven by investment gains and favorable currency translation.

• Net debt reduced by 8% to HK$5.38 billion, and net gearing improved to 41.3% from 48.3%.

• The Group maintained a strong order backlog, positioning for recovery as supply constraints ease in 2026.

Financial highlights

• Gross profit was HK$2.43 billion, down from HK$2.52 billion year-over-year.

• Profit from operations dropped 32% to HK$741.8 million.

• Earnings per share fell to 7.13 cents from 23.81 cents.

• Net asset per share increased to HK$6.46 from HK$6.04.

• Final dividend proposed at HK$0.06 per share, total dividend for 2025 at HK$0.08 per share, up from HK$0.075.

Outlook and guidance

• Anticipates improved sales as supply of key models, especially Subaru Forester, increases post-Q2 2026.

• Focus remains on operational efficiency, cost management, and leveraging a strong order backlog.

• Cautiously optimistic for 2026, with new model launches and expanded EV line-up across key markets.