Key Financial Highlights

• Expected Net Loss for 2025: The Group anticipates a net loss of not more than RMB 1.5 billion for the year ended 31 December 2025.
• Net Loss for 2024: The net loss for the previous year (2024) was approximately RMB 2.1 billion.
• Improvement in Results: The expected reduction in net loss is mainly attributable to a decrease in non-operating expenses, especially a significant reduction in impairment of goodwill and fair value losses.

Details Behind the Improved Performance

1. Goodwill Impairment:
   • The impairment of goodwill relating to the cash-generating unit under subsidiary Beijing Wenmai Hudong Technology Company Limited is expected to be significantly lower in 2025 compared to 2024.
   • The revenue growth rate used for impairment testing was adjusted sharply downward in 2024 (to 2%-157% vs. 16%-213% in 2023), resulting in a large impairment that will not recur at the same scale in 2025.
2. Asset Impairment:
   • Although there is a rise in prepayment write-offs for 2025, the overall asset impairment is offset by reduced impairment of other intangible assets such as intellectual property licenses, content provider licenses, and development expenditure.
3. Fair Value Losses:
   • Fair value losses on financial assets at fair value through profit or loss are expected to decrease in 2025. In 2024, substantial losses were recognized due to investees facing operational difficulties.
   • The improvement in the investment environment in 2025 has also helped relieve some of these fair value losses.

Board and Management Commentary

The Board of Directors, led by Chairman Xiao Jian, has emphasized that the improvement in results is primarily due to the reduction in non-operating expenses and fair value losses. However, investors should note that these figures are based on preliminary unaudited management accounts and are subject to change upon finalization of the audited results.

The audited consolidated annual results for FY2025 are expected to be released by the end of March 2026. Investors are strongly advised to review those results in detail when available.

Potential Share Price Impact

This announcement contains significant price-sensitive information:

• The substantial reduction in net loss from RMB 2.1 billion to RMB 1.5 billion could indicate improving fundamentals, which may affect investor sentiment and share price positively.
• The reduced impairment and fair value loss suggest a stabilization of the Group’s asset base and investment portfolio, potentially lowering perceived risk.
• The warning to exercise caution when dealing in the shares highlights the ongoing uncertainty and the possibility of further volatility.

Directors and Governance

The Board of Directors currently comprises:

• Executive Directors: Mr. Xiao Jian, Mr. Sin Hendrick M.H., J.P., Mr. Fan Yingjie
• Non-executive Directors: Mr. Zhang Shengyan, Mr. Jiang Yukai, Mr. Liu Shanshan
• Independent Non-executive Directors: Ms. Ng Yi Kum, Mr. Tang Liang, Mr. Ho Orlando Yaukai

Investor Guidance

Shareholders and potential investors are advised to exercise caution when dealing in the shares of CMGE Technology Group Limited. The annual results announcement for the year ended 31 December 2025 will provide further clarity on the Group’s financial position.

Disclaimer

This article is based on information provided in CMGE Technology Group Limited’s profit warning announcement. The financial figures are preliminary and unaudited. Investors should not rely solely on this report and are strongly advised to review the official audited results upon release. The information herein does not constitute investment advice, and readers should exercise independent judgment and consult their financial advisors before making any investment decisions.

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