J‑Star Holding Co., Ltd. (NASDAQ: YMAT) announced a comprehensive realignment that will see the company exit its China operations, write off two minority manufacturing investments totaling approximately $1.7 million, and dissolve its wholly‑owned subsidiary Bohong Technology Jiangsu Co., Ltd., which has no active operations. The company will keep Dongguan Changrong New Material Technology Co., Ltd. for limited trading during the transition.
Prior to the announcement, J‑Star’s first‑half 2025 results showed a 30.7% revenue increase to $10.6 million compared with the same period in 2024, but the gross margin fell from 30.2% to 26.9%. Profit after tax collapsed from $479,000 in H1 2024 to $5,000 in H1 2025, and the company received a Nasdaq non‑compliance notice for maintaining a bid price below $1 for 30 consecutive business days. The write‑off and exit are intended to address these financial pressures and restore compliance.
The company cited escalating geopolitical uncertainty and tightening regulatory scrutiny in China as the primary drivers of the shift. By concentrating resources on a U.S. automated production line, J‑Star aims to reduce supply‑chain exposure, increase operational flexibility, and accelerate growth in high‑value markets such as electric‑bicycle components and automotive parts. The move is also expected to improve the company’s risk profile and support long‑term value creation by leveraging U.S. manufacturing advantages and a more stable regulatory environment.
The U.S. expansion will involve building a fully automated production line, with the exact location and investment amount to be finalized in the coming months. The new facility is projected to enhance production efficiency, lower unit costs, and shorten time‑to‑market for composite products that are central to J‑Star’s electric‑bicycle and automotive segments. The company’s product portfolio also includes sports equipment and healthcare products, and the automation initiative is expected to extend to these areas as well.
CEO Sam Van emphasized that the realignment “reflects our commitment to building a more resilient, innovation‑driven, and globally competitive J‑Star.” He added that the company’s focus on automation and proximity to key customers will strengthen its competitive position and provide a clearer path to profitability while mitigating geopolitical risk.
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