Chairman’s Message
Dear Shareholders,
I am pleased to present the annual report of Luxking Group Holdings Limited (“Luxking” or the “Group”) for the financial year ended 30 June 2026 (“FY2026”).
FY2026 was shaped by a challenging macroeconomic environment, both in domestic and overseas markets. Geopolitical uncertainty, especially in the wake of the US-Iran war added another layer of uncertainty across parts of the supply chain. We responded swiftly by taking a more aggressive and proactive sales and marketing approach, to drive growth in the industrial tapes segment (“IS tapes”). However, the biaxially oriented polypropylene films (“BOPP films”) segment remained more exposed to the broader economic slowdown and saw curtailed demand.
While top line performance moderated in FY2026 due to lower demand, the Group delivered stable operating profit. However, net profit was impacted by a withholding tax which arose from dividend distributions from a wholly owned subsidiary based in the People’s Republic of China (“PRC”) to its non-PRC investment holding company. The inter-company dividend payment was undertaken to realign internal cash resources aimed at optimising the Group’s overall operational and treasury position.
The Group recorded a 2.6% decrease in revenue from RMB 570.1 million in FY2025 to RMB 555.6 million in FY2026, as demand slid due to softer economic conditions in China and overseas markets.
The BOPP films segment posted a 16.9% decline in sales revenue to RMB 141.0 million in FY2026. The IS tapes segment registered a 6.9% increase in sales revenue to RMB 211.0 million in FY2026 while the performance of the general purpose tapes (“General tapes”) segment was largely stable, with sales revenue up 0.3% to RMB 203.6 million in FY2026.
As a result, the IS tapes segment’s revenue contribution widened to 38.0% in FY2026. The General tapes segment’s revenue contribution rose incrementally to 36.6% in FY2026. However, the BOPP films segment’s revenue contribution narrowed to 25.4% in FY2026.
The Group’s gross profit edged 1.0% higher to RMB 90.7 million in FY2026. Gross profit margin rose from 15.8% in FY2025 to 16.3% in FY2026. This was largely due to the robust sales performance from the IS tapes segment. Margins were also supported by improved production capacity and efficiency from the IS tapes and General tapes segments following investments in machinery and equipment.
However, the bottom line was weighed down by a large increase in income tax expense, largely due to withholding tax arising from inter-company dividend payments. As a result, the Group recorded a 63.7% decrease in net profit to RMB 2.8 million in FY2026.
Looking ahead, the Group is cautious on the outlook for FY2027. The operating environment is expected to remain difficult, with higher production, operating and raw material costs, compounded by continued USD/RMB volatility. These cost pressures are likely to persist in the near term. Geopolitical uncertainty could also create risks around the supply chain, including the sourcing and availability of raw materials and logistics.
Slower global growth could weigh on customer demand and spending, especially in more price-sensitive segments. As a result, the Group expects persistent weakness in demand across China and overseas markets over the coming year.
In navigating this period of uncertainty, the Group remains focused on positioning for the long term. The Group will continue investing in upgrades to its machinery and equipment to enhance production capacity and operational efficiency. This will place the Group in a stronger position to capture demand when market conditions improve. These investments also support the Group’s sustainability objectives by enabling a transition towards a more resource-efficient, low carbon operating model.
The Group will also focus on expanding the customer base. It will maintain investment in R&D to develop new products that are aligned with market needs and also expand its customised product offerings to address specific customer requirements. The Group will also increase its presence in local and overseas trade shows to gather insights on changing customer needs, identify industry trends and engage with existing and prospective customers. The Group intends to strengthen its sales force to deepen engagement with existing customers and reach out to new accounts and markets.
With regard to the BOPP films, the Group expects this segment to face headwinds, particularly in the packaging sector given elevated competitive pressures. The Group plans to maintain flexibility in its sales mix and make adjustments according to market conditions.
The Group sees a favourable demand outlook for IS tapes, in particular for customised products. The Group sees attractive prospects in the automotive industry and intends to increase R&D to strengthen its position in this sector. The Group has a sound track record in the smartphone and home appliance industries, and intends to strengthen its competitive position in these sectors by driving product development around customer needs. The Group also plans to bolster its sales force for the IS tapes segment to accelerate new customer wins and deepen existing customer relationships.
To remain competitive in the General tapes segment, the Group will focus on improving cost efficiency. The Group will intensify efforts to expand customer reach and capture additional market share.
The Group has continued to expand the manufacturing plant in Hubei Province (“Hubei plant”) in stages while steadily investing in new machinery at its factory in Zhongshan, Guangdong Province (“Zhongshan factory”). To this end, the Group incurred RMB 20.9 million in cash outflows for property, plant and equipment in FY2026.
At the Hubei plant, the Group invested RMB 9.5 million for the installation of additional silicone-release coating lines, a solar photovoltaic system, and ancillary equipment and facilities. This will enable the Group to increase production of release liners, which will support future production operations at the Zhongshan factory.
At the Zhongshan factory, the Group invested RMB 11.2 million for the installation of two high-speed adhesive coating lines, a solvent recovery system, additional facility upgrades and the acquisition of machinery and equipment. These investments will enable the Group to unlock production capacity for IS tapes and General tapes to capture future demand.
For FY2027, the Group plans to install additional peripheral facilities and systems at the Hubei plant, as well as complete the solvent recovery system and equipment enhancements at the Zhongshan factory.
In FY2026, the Group commenced a phased transition to update its climate related disclosures to align with the IFRS Sustainability Disclosure Standards. This builds on the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations adopted in prior years. It reflects the Group’s commitment to transparent, consistent, and standards-aligned reporting of its sustainability performance, risks, and impacts. In FY2026, the Group installed a 0.8 MWp solar photovoltaic system at the Hubei plant, expanding solar capacity from 1.6 MWp to 2.4 MWp. Looking ahead, the Group will pursue further efficiency improvements and renewable energy investments to support long‑term emissions reduction across its operations.
The Board extends its sincere appreciation to the Group’s management and employees for their commitment and valuable contributions throughout the year. The Board also conveys its deepest gratitude to its shareholders, customers, suppliers, and business partners for their continued trust and support.
Leung Chee Kwong
Executive Chairman and Chief Executive Officer
23 September 2026
