Chervon (2285) H2 2025 earnings summary

Executive summary

• Revenue declined 8.2% year-over-year to US$1,627.8 million due to cautious customer procurement amid China-U.S. tariff tensions, but market position was strengthened, especially with flagship brand EGO achieving double-digit POS growth in North America.

• Net profit decreased 13.3% to US$97.7 million, with adjusted net profit (excluding non-recurring items) down 42.2% to US$78.5 million.

• Gross profit margin fell by 180bps to 32.9%, attributed to higher costs from tariffs and lower production volume.

• Strong operating cash flow of US$229.4 million, up 36.8% year-over-year.

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

Financial highlights

• Revenue: US$1,627.8 million (down 8.2% YoY).

• Net profit: US$97.7 million (down 13.3% YoY); adjusted net profit: US$78.5 million (down 42.2% YoY).

• Gross profit: US$535.9 million (down 13.0% YoY); gross margin: 32.9%.

• Basic EPS: US$0.19 (down 13.6% YoY).

• Cash and cash equivalents: US$379.3 million (up from US$328.8 million).

• Bank loans: US$254.9 million (down from US$295.6 million); gearing ratio stable at 0.3.

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.

• Continued investment in Vietnam manufacturing expansion and innovation in lithium-ion and intelligent technologies.