ZG Group (SEHK:6676) Half Year Loss Deepens And Reinforces Bearish Earnings Narratives

ZG Group (SEHK:6676) has just posted its FY 2025 first half numbers, with revenue at about C¥797.4 million and a basic EPS loss of C¥0.66 per share, setting a cautious tone around profitability. Over the past few first half periods, revenue has moved from roughly C¥710.9 million in 2024 to C¥797.4 million in 2025, while basic EPS has shifted from a loss of C¥0.31 to a deeper loss of C¥0.66, underscoring pressure on earnings. For investors, the key takeaway from this set of results is that margins remain under strain and the income statement is still firmly in loss making territory.

See our full analysis for ZG Group.

With the headline numbers on the table, the next step is to assess how this earnings profile aligns with widely held narratives about ZG Group and to consider where the latest figures may challenge those views.

Curious how numbers become stories that shape markets? Explore Community Narratives

Losses widen to C¥498.8 million

• For the first half of FY 2025, ZG Group reported net income excluding extra items of a loss of C¥498.8 million, compared with a loss of C¥74.1 million in the same period of FY 2024, showing that losses at the business level have become much heavier year on year.
• Bears highlight that over the past five years, losses have increased at about 14.4% per year, and the latest first half loss of C¥498.8 million fits that pattern.
  • That five year trend of losses rising at 14.4% a year lines up with the trailing 12 month loss of C¥592.5 million, so there is no sign yet of a clear turn back toward profit.
  • The deeper first half loss versus the prior year makes it harder for a bearish view to be challenged by recent numbers, because the data given does not show any period of positive net income.

Revenue over C¥2.1b, still unprofitable

• On a trailing 12 month basis to the second half of 2025, total revenue stands at C¥2.1b, while net income excluding extra items for that same trailing period is a loss of C¥592.5 million, meaning the company is generating sizeable sales but not translating them into profit.
• What stands out for a more optimistic narrative about the business model is that ZG Group operates a digital platform around steel and industrial products. Yet the trailing 12 month figures show a loss of C¥592.5 million alongside C¥2.1b of revenue.
  • Supporters of a bullish angle often point to the platform, SaaS and data elements as potential higher margin sources, but the current loss suggests these services have not yet offset costs in the reported numbers.
  • The breadth of services described in the narrative sits in contrast with the repeated losses over recent periods, so any bullish case has to lean more on the business concept than on the recent profit track record.

For a fuller picture of how different investors are interpreting this mix of scale and losses, it helps to see how people are framing the story in one place, which you can do through the Curious how numbers become stories that shape markets? Explore Community Narratives.

P/S at 0.5x against CNY losses

• The current P/S multiple of 0.5x is below the Hong Kong Trade Distributors industry average of 0.7x and well below the peer average of 3.2x, while the share price of HK$1.21 sits far under the given DCF fair value of HK$21.93, even as the trailing 12 month net loss totals C¥592.5 million.
• Critics argue that the low P/S multiple and wide gap to the DCF fair value are tied to the company’s unprofitable record.
  • The fact that the stock trades at about 0.5x sales while peers sit closer to 3.2x supports the idea that the market is heavily discounting the current loss profile.
  • At the same time, the difference between the HK$1.21 share price and the HK$21.93 DCF fair value in the data highlights how far market pricing is from that model based estimate, which some investors may see as a valuation signal to weigh against the continuing losses.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on ZG Group's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

The numbers here raise questions, so it makes sense to check the figures yourself, weigh both sides, and then move quickly to shape your own view with the 1 key reward and 1 important warning sign.

See What Else Is Out There

ZG Group is generating sizeable revenue but remains in deep loss making territory, with widening C¥498.8 million first half losses and a persistent trailing C¥592.5 million loss.

If you want ideas where the balance between risk and return may look more comfortable, check out the 262 resilient stocks with low risk scores to quickly focus on companies with more resilient profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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