Soft International (2569) H2 2025 earnings summary

Executive summary

• FY2025 revenue rose 20.3% YoY to RMB905.5m; gross profit rose 35.2% to RMB314.8m, while profit for the year increased to RMB55.9m from RMB54.8m.

• Higher online promotion and distribution spending weighed on operating costs as capacity and branded-product sales expanded; six production lines were established, with two nonwoven lines in trial production.

Financial highlights

• Revenue was RMB905.5m vs RMB752.8m; cost of sales was RMB590.7m vs RMB519.9m; gross profit was RMB314.8m vs RMB232.9m.

• Gross margin improved to 34.8% from 30.9%; profit before tax was RMB67.4m vs RMB69.1m, and profit for the year was RMB55.9m vs RMB54.8m.

• Selling and distribution expenses increased 74.3% to RMB190.7m; online sales and promotion expenses rose 101.3% to RMB128.4m, including increased promotion in H2.

• Adjusted for listing expenses, which fell to RMB4.9m from RMB13.7m, the reported profit comparison includes a lower non-recurring listing-expense burden in FY2025.

• Basic and diluted EPS were both RMB5.93 cents vs RMB7.30 cents (2024 restated).

Outlook and guidance

• Management sees rising disposable incomes and demand for quality, branded products as supportive of growth; product innovation and operational efficiency remain strategic priorities.

• Six new lines expand capacity: one babycare and three feminine-care lines are operational; two nonwoven lines are in trial production. A new Shishi production base is under construction, with intended uses still being planned.

• IPO proceeds allocated to machinery, branding, warehouse and IT investment, and working capital; HK$25.2m remained unutilised at year-end, with most remaining allocations targeted for use by 31 December 2026.

• Management expects cash, liquid assets, future revenue and available facilities to meet working-capital requirements.