Aumake’s Rising Losses and Cash Risks Cast Shadow Over Growth Plans
Aumake Limited reported a sharp 45% drop in half-year revenue alongside a 24% increase in net loss, while securing new capital and a major distribution deal to support its pivot in the China market.
- Revenue down 45% to $7.5 million for H1 FY2026
- Net loss increased 24% to $2.47 million
- Raised $1.5 million in new equity capital
- Secured $10 million, four-year distribution agreement with EZZ Life Sciences
- Board reshuffle and business streamlining to reduce costs
Revenue and Losses
Aumake Limited’s half-year results for the period ending 31 December 2025 reveal a challenging trading environment, with revenues falling 45% to $7.5 million compared to the previous corresponding period. Despite efforts to streamline operations, the company’s net loss widened by 24% to $2.47 million, reflecting ongoing pressures in its core markets.
Strategic Initiatives and Capital Raising
In response to these headwinds, Aumake undertook a significant business streamlining process aimed at reducing overhead costs. The company also raised $1.5 million in working capital through a strategic equity placement, bolstering its balance sheet to support growth initiatives. Governance was strengthened with the appointment of two new non-executive directors, signaling a renewed focus on compliance and financial control.
New Market Opportunities and Partnerships
Notably, Aumake secured a $10 million, four-year distribution agreement with EZZ Life Sciences, marking a strategic entry into the high-growth China over-the-counter (OTC) medicine market. This deal aligns with the company’s pivot towards expanding its footprint in China, which remains its primary revenue source despite geopolitical uncertainties.
Operational Challenges and Risk Management
The company faces several risks, including reliance on key management personnel, cash flow constraints, and the impact of strained Australia-China trade relations. Two joint ventures, 168 Express Pty Ltd and Newera Pty Ltd, have been deemed commercially unviable and are slated for divestment, allowing Aumake to concentrate resources on its core sales and marketing activities in China.
Outlook and Going Concern
While the directors express confidence in managing cash flows and securing further capital, the financial statements highlight material uncertainty regarding Aumake’s ability to continue as a going concern. The company’s future hinges on its ability to increase sales, improve gross margins, and navigate the complex geopolitical landscape affecting its key markets.
Bottom Line?
Aumake’s strategic moves and capital raise provide a lifeline, but the road to profitability remains uncertain amid market and geopolitical risks.
Questions in the middle?
- How will Aumake manage cash flow pressures if geopolitical tensions with China escalate?
- What are the expected financial impacts and timeline for divesting the two joint ventures?
- Can the new distribution agreement with EZZ Life Sciences materially improve margins and sales growth?
