Financial profits reappear for Shouhui due to investments in financial tools
Shouhui Group Ltd. Reports Net Profit Turnaround Amidst Challenging Market Conditions
Shouhui Group Ltd. (2621.HK) has reported a net profit turnaround for the first half of 2025, marking a significant reversal from a net loss of 750 million yuan a year earlier. The company's net profit is expected to range between 660 million yuan and 680 million yuan, according to its latest financial report [1].
The net profit turnaround is primarily attributed to gains from changes in the book value of financial instruments issued to investors. These gains increased by approximately 795 million to 815 million yuan compared to a loss in the previous year [1]. However, it's important to note that the company's adjusted net profit, which excludes these financial instrument gains, actually declined by about 50 million to 70 million yuan year-on-year [1].
The decline in adjusted net profit is mainly due to growing macroeconomic uncertainty, weaker demand for financial products, and lower brokerage rates in the insurance sector under the government's "integration of reporting and accounting" policy [1]. As a result, Shouhui Group estimates it will report revenue of 545 million yuan to 565 million yuan for the first half of the year, down by about 140 million to 160 million yuan year-on-year [1].
Despite the challenging market conditions, the company's costs and expenses are expected to fall in the range of 75 million yuan to 95 million yuan for the first half of the year [1].
In the midday trading session on Friday, Shouhui Group Ltd.'s stock saw an increase, with the midday price of the stock rising by 5.79% [2]. By the midday break, Shouhui Group Ltd.'s stock had risen to HK$9.43, up from its opening price [2]. This midday increase in the stock price was also reflected in the midday closing price, which represented a 5.79% increase [2].
This positive movement in the stock price comes as investors react to the company's net profit turnaround and the overall financial report for the first half of the year. However, it's important to note that the underlying core business faced headwinds from macroeconomic and regulatory pressures [1][2].
[1] Shouhui Group Ltd. (2025). Shouhui Group Ltd. 2025 Interim Report. Retrieved from Shouhui Group Ltd. website
[2] Reuters (2025). Shouhui Group Ltd. stock surges on net profit turnaround. Retrieved from Reuters
The net profit turnaround at Shouhui Group Ltd. was largely due to increases in gains from financial instruments, a positive development in the finance sector of their business. Despite this turnaround, the company's adjusted net profit actually decreased due to challenging market conditions, weaker demand, and lower brokerage rates.
