China Environmental Resources Group Limited Issues Positive Profit Alert for 2H 2025

Turnaround from Loss to Profit Expected—Key Drivers and Impact for Investors

China Environmental Resources Group Limited (“the Company”, Stock Code: 1130) has issued a significant positive profit alert, announcing a major turnaround in its financial performance for the six months ended 31 December 2025. The Group expects to report an unaudited consolidated profit of not less than HK\$10 million, compared to a loss of approximately HK\$16.55 million for the same period in 2024.

Key Highlights of the Interim Results

• Return to Profitability: Projected profit of at least HK\$10 million for 2H 2025, compared to a loss of HK\$16.55 million in 2H 2024—a swing of over HK\$26 million.
• Revenue Decline but Improved Gross Profit: Revenue decreased to approximately HK\$27.3 million, but gross profit slightly increased to HK\$6.5 million, indicating better cost management or improved margins.
• Other Income Surge: Other income increased substantially to HK\$12.4 million, supporting overall profitability.
• Cost Control: Administrative and operating expenses decreased to around HK\$14.8 million, reflecting tightened expenses and enhanced operational efficiency.
• Investment Properties: Fair value gain on investment properties jumped to approximately HK\$12.6 million, representing a significant non-operating income source.
• Biological Assets: Loss arising from changes in fair value less costs to sell of biological assets decreased to around HK\$2.3 million, showing reduced negative impact from this segment.
• Lower Finance Costs: Finance costs fell to HK\$2.8 million, reflecting possible debt reduction or better financing terms.
• Profitable Asset Sales: Gain on disposal of investment properties increased to HK\$1.6 million.
• Reduced Income Tax Credit: The income tax credit decreased to HK\$1 million, which may indicate lower deferred tax assets or adjustments in tax treatment.

Important Information for Shareholders and Investors

• Price-Sensitive Information: This profit alert is made in accordance with the Listing Rules and the Inside Information Provisions under Hong Kong law. The expected swing to profitability is significant and could have a material impact on the Company’s share price.
• Results Not Yet Final: The figures are based on preliminary internal accounts and information currently available. The results are unaudited and have neither been reviewed by external auditors nor the audit committee. Final results may differ from the numbers announced.
• Upcoming Results Announcement: The unaudited interim results for the six months ended 31 December 2025 are scheduled to be published on 27 February 2026. Shareholders and potential investors should review the official announcement for the most accurate and updated figures.
• Caution Advised: Given the preliminary nature of this information, shareholders and investors are advised to exercise caution when dealing in the shares of the Company.

Corporate Governance

As of the announcement date, the Board consists of six executive Directors (Mr. Yeung Chi Hang, Mr. Leung Kwong Choi, Mr. Wong Po Keung, Mr. Chung Siu Wah, Mr. Chik To Pan, and Mr. Liu Yafei) and three independent non-executive Directors (Mr. Heung Chee Hang, Eric, Mr. Lee Chi Ho, and Ms. Lai Pik Chi, Peggy).

Conclusion

The swing from a significant loss to a profit in the latest reporting period, driven by improved margins, increased other income, fair value gains on investment properties, and tighter cost controls, is an important development for China Environmental Resources Group Limited. This turnaround is likely to be closely watched by the market and could have a notable effect on the Company’s share price, especially upon confirmation of the final results.

Disclaimer: The information provided above is based on the Company’s preliminary announcement and is subject to adjustment upon finalization of the interim results. This article is for informational purposes only and does not constitute investment advice. Shareholders and potential investors should read the full official interim results and consult professional advisors before making any investment decisions.

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