AUX's first year of listing saw net profit plummet by 23%, with 4,000 employees laid off

DoNews April 1 News, according to Sina Technology reports, recently, AUX Electrical has released its first annual financial report since listing. The financial report shows that AUX Electrical achieved revenue of 30.05B yuan in 2025, an increase of 0.97% year-on-year; the profit attributable to the parent company’s owners was 2.24B yuan, a decrease of 23.2% year-on-year.

In terms of revenue, AUX Electrical’s stagnation is mainly due to the decline in income from the Huacunzi brand and the decrease in revenue in the European and North American markets. Specifically, the high-cost-performance Huacunzi brand’s revenue in 2025 dropped significantly by 39%; revenue in Europe and North America also declined by 6.3% and 30.7%, respectively.

Regarding employees, the financial report shows that AUX Electrical had 15,631 employees at the end of 2025, down from 19,794 at the end of 2024, a reduction of 4,163 employees; accordingly, total employee compensation costs decreased from 2.36B yuan in 2024 to 2.36B yuan in 2025.

In terms of R&D, AUX Electrical’s R&D expenditure in 2025 was 689 million yuan, a decrease of 3.0% year-on-year. The financial report states that this reduction mainly resulted from optimizing the R&D personnel structure to improve innovation efficiency and resource allocation.

However, AUX Electrical’s sales expenses saw a significant increase. In 2025, AUX Electrical’s sales and distribution expenses amounted to 1.09B yuan, an increase of 326 million yuan from 2024, a growth of 25.5%.

The company explained in the financial report that this increase was mainly due to business expansion, increased costs of newly established overseas sales companies, and higher promotional expenses. To support long-term growth strategies, the company continues to allocate resources to enhance overseas market brand awareness and expand sales and marketing capabilities.

Currently, however, the AUFIT brand’s recognition is still low, and its cost-performance route conflicts somewhat with Huacunzi; the ShinFlow brand has not yet generated scaled revenue.

In 2025, AUX brand revenue grew slightly by 2.5% from 15.52B yuan in 2024 to 15.91B yuan; Huacunzi brand revenue, however, dropped sharply by 39% from 1.36B yuan to 829 million yuan; additionally, ODM business revenue declined by 3.8%, and other business revenues also fell by 16.3%.

Furthermore, in 2025, AUX Electrical’s revenue in Mainland China increased slightly by 1.5%, while revenue in Europe decreased by 6.3% year-on-year, North American revenue plummeted by 30.7% year-on-year, and South American revenue only increased slightly by 0.1%.

Regarding gross profit margin, AUX Electrical’s gross margin in 2025 was 18.8%, compared to 21.0% in 2024. The company explained that the decline in gross margin was mainly due to intense market competition, rising raw material prices, and high inventory levels in several regions.

Data shows that in 2025, 87.3% of AUX Electrical’s revenue came from household air conditioners, and 10.9% from central air conditioners, meaning over 98% of AUX Electrical’s revenue depends on the air conditioning category.

On September 2, 2025, AUX officially listed on the Hong Kong Stock Exchange, with an issue price of HKD 17.42. On the same day, the stock price dropped below the issue price during trading. Since then, AUX Electrical’s stock price has fluctuated sharply, closing at HKD 9.48 per share on April 1, representing a cumulative decline of over 45% from the issue price. The total market value shrank from an initial HKD 27.6 billion to HKD 15 billion, evaporating over HKD 12.6 billion.