Sanyuan Co., Ltd. 2025 Performance Guidance: Significant Impairment Charges on Equity-Accounted Investments Expected to Result in Net Loss

Sanyuan Co., Ltd. (600429.SH) released its earnings forecast for 2025 on March 12. Due to significant impairment losses from its equity investment in France HCo (HCo France S.A.S.), the company’s consolidated financial statements are expected to show a loss in 2025; however, excluding this non-recurring factor, the company’s core business profit will see substantial growth, and profitability will significantly improve.

Impairment Losses from Equity Investment Drag Down Overall Performance

The announcement states that the company holds a 49% stake in France HCo. Due to declining market demand and increased external competition, France HCo is preliminarily expected to record goodwill impairment in 2025. This will result in a reduction of the book value of Sanyuan’s long-term equity investment by approximately 496 million to 616 million yuan.

As a result, the company expects its net profit attributable to the parent company for 2025 to be between -3.56 billion and -1.78 billion yuan; net profit excluding non-recurring gains and losses is expected to be between -3.76 billion and -1.98 billion yuan.

It is worth noting that the impairment test for France HCo has not yet been finalized and has not been audited; the final impact may differ.

Core Business Profits Significantly Increase, Strengthening Advantage in Low-Temperature Fresh Milk

Excluding the impact of the impairment loss on the long-term equity investment, the company’s core business performance is strong. According to estimates, in 2025, the company will achieve a net profit attributable to the parent company of between 260 million and 318 million yuan, representing an increase of 374% to 480% compared to the same period last year (54.81 million yuan). After excluding non-recurring gains and losses, core business net profit is projected to be between 240 million and 298 million yuan, an increase of 705% to 899% year-over-year.

The company states that in 2025, it is expected to achieve operating revenue of around 6.35 billion yuan, a slight decline year-over-year, but with a significant improvement in operating quality.

In its core market of Beijing, Sanyuan’s leading position is further consolidated. According to Kantar Consumer Index data, by the end of 2025, the company’s liquid milk market share in Beijing remains the highest; low-temperature fresh milk accounts for over 50% of the market share in Beijing and continues to grow, maintaining its leading position.

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