On March 26, Jifeng Packaging (01820) announced its annual results. As of December 31, 2024, the company's revenue was RMB 2.132 billion, a year-on-year increase of 6.5%. However, gross profit fell to RMB 324 million, a year-on-year decrease of 5.1%. More worryingly, the company incurred a loss of RMB 19.37 million within the year, while in 2023 it had made a profit of RMB 22.41 million, with the loss increasing by 186.4%. Basic earnings per share were a loss of 6 cents, compared to earnings of 7 cents in 2023, representing a decline of 185.7%. The board decided not to declare a final dividend but will distribute a special dividend of HKD 0.08 per share to shareholders on July 7, 2025.

In the financial review, the cost of sales increased to 1.808 billion yuan, rising by 8.9% year-on-year, primarily due to an increase in sales volume. Meanwhile, selling and distribution expenses also rose to 145 million yuan, increasing by 13.2% compared to the previous year. Administrative expenses increased to 167 million yuan, mainly due to the commencement of new factories and the implementation of new platforms. Income tax expenses plummeted to 280,000 yuan, decreasing by 98.1%, largely because of the reduction in profit before tax.

In the management discussion and analysis section, the company mentioned that the newly established Hubei production plant commenced operations in 2024, and the new plant in Huzhou, Zhejiang, began trial operations in the second half of the year. Despite an increase in sales volume, the overall profit did not increase due to the continuous decline in the unit price of corrugated paper packaging products. Additionally, the initial losses from the two new plants had a negative impact on performance. The company will continue to focus on cost control and market expansion to enhance profitability.

Overall, the company's sales revenue from corrugated paper packaging products and corrugated cardboard has both increased, with the former at approximately 1.918 billion yuan and the latter at about 214 million yuan, representing growths of 5.8% and 12.8%, respectively. However, the decline in overall gross profit and profit indicates challenges from intense market competition and price pressure.