OneConstruction Group Limited Announces Annual Financial Results for the Fiscal Year Ended March 31, 2025

Rhea-AI Summary

OneConstruction Group (NASDAQ: ONEG), a Hong Kong-based structural steelwork contractor, reported its FY2025 financial results showing mixed performance. Revenue declined 16.2% to $53.2 million, while gross profit decreased 11.9% to $3.9 million. Despite overall revenue decline, residential construction projects in the public sector grew 23.1% to $39.7 million.

The company completed its IPO in January 2025, raising $7 million at $4.00 per share. Net income decreased to $0.9 million from $1.8 million in FY2024, impacted by higher administrative expenses related to the IPO. In February 2025, ONEG established an equity incentive plan, issuing 3 million ESOP shares to employees at $0.0001 per share.

Positive

• Gross profit margin improved to 7.4% from 7.0% in FY2024
• Public sector residential construction revenue increased 23.1% to $39.7 million
• Successfully completed IPO raising $7 million in January 2025
• Expected construction industry CAGR of 4.5% between 2025-2027 in target markets

Negative

• Revenue declined 16.2% to $53.2 million year-over-year
• Net income decreased 50% to $0.9 million from $1.8 million
• Cash position deteriorated to $0.7 million from $1.6 million
• Administrative expenses increased 153.9% to $2.2 million due to IPO costs

Insights

Financial Analyst

OneConstruction's FY2025 shows concerning financial decline with 16.2% revenue drop and 50% profit reduction despite public sector growth.

OneConstruction Group's FY2025 financial results reveal several concerning trends. Revenue declined 16.2% to $53.2 million, driven by contractions in both public (-14.1%) and private sectors (-27.3%). The bright spot was residential public sector projects, which grew 23.1% to $39.7 million, showing the company is shifting its business mix toward government residential contracts.

Profitability deteriorated significantly, with net income falling 50% to $0.9 million from $1.8 million previously. This decline stems from multiple factors: reduced operational profits (-$0.5 million), increased finance costs (+$0.23 million), and higher tax expenses (+$0.1 million). Administrative expenses surged 153.9% to $2.2 million, primarily due to IPO-related costs.

The 0.4% improvement in gross margin to 7.4% offers minimal consolation, especially considering the company's deteriorating cash position. Cash balances declined to $0.7 million from $1.6 million, with operating activities consuming $5.1 million in cash—a significant red flag indicating potential working capital challenges.

The company completed its IPO in January 2025, raising $7 million gross ($4.00/share), which should temporarily address cash concerns. However, the company immediately diluted shareholders by issuing 3 million ESOP shares in May 2025 at just $0.0001 per share, representing significant dilution just months after going public.

While management highlights its positioning in Hong Kong's public construction sector (projected 4.5% CAGR through 2027), the company's actual financial trajectory contradicts this optimistic outlook. The significant cash burn from operations requires close monitoring, as it suggests fundamental business challenges beyond one-time IPO expenses.

OneConstruction Group Limited
(NASDAQ: ONEG)

NEW YORK, Aug. 12, 2025 /PRNewswire/ -- OneConstruction Group Limited, a Cayman Islands exempted company with limited liability that, through its operating subsidiary, OneConstruction Engineering Projects Limited, a company incorporated under the laws of Hong Kong with limited liability, operates as a structural steelwork contractor for construction projects in both the public and private sectors in Hong Kong ("OneConstruction Group","ONEG" or the "Company"), today announced its audited financial results for the fiscal year ended March 31, 2025.

Financial Highlights

• Revenue: Revenue for the year ended March 31, 2025 ("FY2025") decreased by 16.2% to $53.2 million, compared to $63.5 million for the fiscal year ended March 31, 2024 ("FY2024"). The decline was attributed to a 14.1% reduction in revenue from the public sector and a decrease of 27.3% in revenue from the private sector. Despite the decrease in total revenue, revenue derived from residential construction projects in the public sector increased by 23.1% from $32.2 million in FY2024 to $39.7 million in FY2025.
• Gross Profit: Gross profit for FY2025 was $3.9 million, a decrease of 11.9% compared to $4.4 million in FY2024. However, gross profit margin increased by 0.4 percentage points to 7.4%, compared to 7.0% in FY2024. The increase in gross profit margin was attributable to the award of construction projects in the public sector that provided higher profit margins.
• Net Income: Profit after tax for FY2025 decreased to $0.9 million, compared to $1.8 million in FY2024. This reduction was mainly due to a decrease of $0.5 million in profit from operations, an increase of $0.23 million in finance costs and an increase of $0.1 million in income tax expenses during FY2025.
• Cash Flow: The net decrease in cash and cash equivalents of $0.8 million for FY2025 was mainly attributable to the cash outflow of $5.1 million in operating activities and the cash inflow from financing activities of $4.3 million.
• Cash Position: As of March 31, 2025, the consolidated cash balance decreased to $0.7 million, compared to $1.6 million as of March 31, 2024. This decrease was primarily driven by the cash used in operating activities.
• Administration Expenses: Administration expenses were $2.2 million for FY2025, representing an increase of 153.9% from $0.9 million in FY2024. The increase was attributable to legal and professional fees and other administrative expenses incurred for the initial public offering conducted in FY2025.

Operational Highlights

• A Top Hong Kong Steelwork Service Provider:
  ⁻ ONEG is one of the top service providers in the Hong Kong structural steelwork industry with an established reputation and proven track record.
• Custom Steelwork Solutions:
  ⁻ ONEG offers tailored solutions in structural steelwork service designed to meet client needs.
  ⁻ Leveraging its established network and supplier relationships, ONEG believes it is well-equipped to manage tight timelines and accommodate supplemental orders.
  ⁻ ONEG' believes that its ability to promptly respond to unforeseen demands and adjust supply and installation schedules enhances its appeal to clients.
• Well-Positioned for Public Sector Construction Growth:
  ⁻ ONEG is primarily engaged in works for the growing public sector.
  ⁻ According to the Construction Expenditure Forecast prepared by Construction Industry Council of Hong Kong, the construction expenditures for building works in both public and private sectors and civil works in the public sector (i.e., the construction works that most involved the use of structural steelwork) in Hong Kong is expected to grow at a CAGR of 4.5% between 2025 and 2027, despite a recent decline in construction expenditures for the private sector.
• Visionary and Experienced Leadership:
  ⁻ ONEG is led by a visionary and experienced management team with robust technical and operational expertise.
  ⁻ ONEG's management team, including its executive director and general manager, brings substantial technical and management experience, complemented by extensive industry networks.
  ⁻ ONEG's strong and dedicated execution team collaborates closely with clients to effectively meet their needs and adapt to market trends.

ONEG's Recent Development

On January 2, 2025, ONEG announced the closing of its initial public offering of 1,750,000 ordinary shares at a public offering price of $4.00 per share (the "Offering"). The aggregate gross proceeds from the Offering were $7 million, before deducting underwriting discounts and other related expenses. The net proceeds from the Offering were mainly for funding up-front costs for future projects, expanding management and technical teams, and bolstering working capital.

The Offering was conducted on a firm commitment basis. American Trust Investment Services and WestPark Capital acted as underwriters. WestPark Capital was the book-running manager for the Offering. Hunter Taubman Fischer & Li LLC acted as U.S. securities counsel to ONEG, and Ortoli Rosenstadt LLP acted as U.S. securities counsel to the underwriters in connection with the Offering.

In February 2025, ONEG established an equity incentive plan to attract and retain the best available personnel for positions of responsibility with ONEG and provide them with additional incentives for the purpose of promoting its long-term business success. ONEG has reserved 3,000,000 authorized but unissued ordinary shares for issuance under the plan ("ESOP Shares"). In May 2025, ONEG issued 3,000,000 ESOP Shares to certain employees under the plan at the consideration of $0.0001 for each ESOP Share.

Outlook

Looking ahead, ONEG will remain focused on expanding its market presence, particularly in the public sector. ONEG is committed to driving operational efficiency and delivering sustainable growth in the face of ongoing macroeconomic challenges.

About the OneConstruction Group

OneConstruction Group is a structural steelwork contractor based in Hong Kong. Through its operating subsidiary, ONEG specializes in the procurement and installation of structural steel across a diverse range of construction projects in Hong Kong, including residential and commercial developments as well as infrastructure works. While much of its work is commissioned by the public sector, ONEG also serves private clients, delivering customized steel solutions tailored to Hong Kong's construction needs. For more information, please visit ONEG's website: www.OneConstruction.com.hk. 

Forward-looking Statements

All forward-looking statements, expressed or implied, in this release are based only on information currently available to us and speak only as of the date on which they are made. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions in this prospectus. Except as otherwise required by applicable law, ONEG disclaims any duty to publicly update any forward-looking statement, each of which is expressly qualified by the statements in this section, to reflect events or circumstances after the date of this release. These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the "Risk Factors" section of the registration statements filed with the U.S. Securities and Exchange Commission (the "SEC"). Although ONEG believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and ONEG cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in ONEG's registration statement and other filings with the SEC. Additional factors are discussed in ONEG's filings with the SEC, which are available for review at www.sec.gov. 

For more information, please contact:

Investor Relations

Mr. Gordon Li
gli@oneconstruction.com.hk 

Media Relations

Ms. Callis Lau / Mr. Gary Li / Ms. Lorraine Luk
oneg@iprogilvy.com 

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SOURCE OneConstruction Group Limited

FAQ

What were OneConstruction Group's (ONEG) key financial results for FY2025?

ONEG reported revenue of $53.2 million (down 16.2%), gross profit of $3.9 million (down 11.9%), and net income of $0.9 million (down 50%) for FY2025.

How much did OneConstruction Group raise in its IPO and when?

OneConstruction Group completed its IPO on January 2, 2025, raising $7 million by offering 1,750,000 ordinary shares at $4.00 per share.

What caused the decline in ONEG's revenue for FY2025?

The revenue decline was due to a 14.1% reduction in public sector revenue and a 27.3% decrease in private sector revenue, despite growth in residential construction projects.

How did ONEG's cash position change in FY2025?

ONEG's consolidated cash balance decreased to $0.7 million from $1.6 million, primarily due to $5.1 million cash outflow from operating activities, partially offset by $4.3 million inflow from financing activities.

What is OneConstruction Group's employee stock incentive plan?

In February 2025, ONEG established an equity incentive plan with 3 million authorized ESOP shares, which were issued to employees in May 2025 at $0.0001 per share.