OSL Group (SEHK:863) Loss Worsens In 2H FY 2025 Challenging Profitability Narratives

OSL Group (SEHK:863) has just posted its FY 2025 numbers, with second half revenue of HK$293.3 million and a basic EPS loss of HK$0.49, while trailing twelve month figures show revenue of HK$488.8 million and a basic EPS loss of HK$0.57. The company has seen revenue move from HK$250.9 million in the second half of FY 2024 to HK$293.3 million in the second half of FY 2025, alongside a shift from basic EPS of HK$0.11 to a basic EPS loss of HK$0.49. This sets up a results season that puts profitability and margin direction firmly in focus for investors.

See our full analysis for OSL Group.

With the headline numbers on the table, the next step is to set these results against the most followed narratives around OSL Group to see which storylines hold up and which assumptions on growth and margins start to look stretched.

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

Revenue momentum but TTM still loss making

• On a trailing twelve month view to 2H FY 2025, revenue sits at HK$488.8 million while net income excluding extra items shows a loss of HK$386.8 million, so higher sales have not yet translated into profitability.
• What stands out for the bullish view that focuses on strong top line growth and improving earnings is that forecast revenue growth of 47.3% a year and forecast earnings growth of 133.27% a year sit alongside a trailing loss, which means:
  • The reported reduction in losses over the past five years at an average rate of 22.7% a year supports the idea that the business has been moving toward smaller losses over time.
  • At the same time, the current trailing twelve month net loss of HK$386.8 million and basic EPS loss of HK$0.57 show that the optimistic case still relies on future improvement rather than current profitability.

Analysts expecting OSL Group to become profitable within three years are effectively treating this HK$386.8 million loss as a turning point, not a new normal, so it is worth understanding how that view is built up in more detail before you rely on it 📊 Read the what the Community is saying about OSL Group.

FY 2025 second half loss deepens

• In 2H FY 2025, OSL Group recorded total revenue of HK$293.3 million and a net loss excluding extra items of HK$366.6 million, alongside a basic EPS loss of HK$0.49, compared with a net profit of HK$65.6 million and basic EPS of HK$0.11 in 2H FY 2024.
• Critics highlight this swing into a much larger loss as a clear challenge to any bullish narrative built on improving profitability, because:
  • The move from HK$65.6 million profit in 2H FY 2024 to a HK$366.6 million loss in 2H FY 2025 means that, at least over this latest half, the business performance has been weaker than the longer term trend of gradually narrowing losses.
  • The shift from positive basic EPS of HK$0.11 to a loss of HK$0.49 in the same comparison period underlines that per share earnings for existing holders have moved in the opposite direction to the five year improvement story.

Rich 24.5x P/S with dilution risk

• The shares trade on a P/S of 24.5x versus around 3.5x for the Hong Kong Capital Markets industry and 6.5x for peers, and this sits alongside substantial shareholder dilution over the last year.
• What is striking for investors weighing a more cautious narrative is how this elevated multiple interacts with recent dilution and ongoing losses, because:
  • The combination of a 24.5x P/S and trailing twelve month net loss of HK$386.8 million means the market is valuing each dollar of current sales far more highly than the sector, despite the company not yet being profitable.
  • Substantial dilution over the past year means that, even as analysts see strong forecast revenue and earnings growth, each new share has a smaller claim on those future profits unless earnings grow fast enough to offset the larger share count.

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 OSL 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.

With sentiment split between a rich P/S and deep recent losses, it makes sense to run the numbers yourself and decide how comfortable you are with the risk and reward trade off. To help you weigh both sides quickly, take a closer look at the 2 key rewards and 1 important warning sign.

See What Else Is Out There

OSL Group is carrying deep recent losses, a trailing twelve month net loss of HK$386.8 million and a rich 24.5x P/S alongside shareholder dilution.

If that mix of high valuation, earnings pressure and dilution feels like a lot to stomach right now, it is worth checking out 274 resilient stocks with low risk scores that focus on more resilient profiles and potentially smoother return paths.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com