Ever Reach Group (Holdings) Company Limited Issues Profit Warning for FY2025

Key Points from the Profit Warning Announcement

• Revenue Decline: The Board of Ever Reach Group (Holdings) Company Limited expects revenue for the year ended 31 December 2025 (FY2025) to be in the range of RMB2.4 billion to RMB2.6 billion. This represents a year-on-year decrease of approximately 5.9% to 13.1% compared to RMB2.8 billion recorded in FY2024.
• Continued Losses: The Company anticipates a loss after tax for FY2025 in the estimated range of RMB200 million to RMB260 million. This is a marginal improvement compared to the RMB264.0 million loss after tax in FY2024, but the Group will remain in the red for another consecutive year.
• Underlying Causes: The decrease in revenue is mainly attributed to the prolonged downturn in the PRC (People’s Republic of China) property market. Despite various government support measures, market sentiment and homebuyer confidence remained weak, resulting in slower-than-expected recovery in transaction volumes and pricing.
• Declining Gross Profit Margin: The expected loss for FY2025 is also due to a decrease in gross profit margin, which stems from increased provisions for declines in the value of properties held or under development for sale. This suggests further write-downs and impairment of assets.
• Unaudited Results: The information provided is based on preliminary assessments of consolidated management accounts, and has not yet been audited or reviewed by the independent auditor or the audit committee of the Board. Actual results may differ from the estimates.
• Investor Caution: The Company explicitly advises shareholders and potential investors to exercise caution when dealing in its securities, given the anticipated losses and challenging market conditions.
• Further Disclosure: Full details of the Group’s financial performance for FY2025 will be released in the final results announcement by the end of March 2026.
• Board Composition: The announcement notes the current executive directors (Mr. Li Xiaobing, Mr. Wang Zhenfeng, Ms. Li Man, and Mr. Wang Quan) and independent non-executive directors (Mr. Lee Kwok Lun, Mr. Wei Jian, and Mr. Fang Cheng).

Implications for Shareholders and Investors

• Potential Share Price Impact: The ongoing losses and significant revenue decline are likely to be price sensitive. The continued challenges in the PRC property market and further asset write-downs could negatively affect investor sentiment and the Company’s valuation.
• Risk Factors: The announcement points to ongoing risks related to market recovery, asset values, and profitability. Investors should be wary of the potential for future provisions and impairment charges, especially if the property sector does not rebound.
• Transparency and Timing: The unaudited nature of the preliminary numbers means there is a risk of further negative surprises when the audited results are released. Investors will need to monitor the Company’s next official disclosure by the end of March 2026.
• Strategic Response: The Company has not outlined any turnaround strategies or mitigating actions in this announcement. Shareholders may wish to seek clarification on the Group’s plans for recovery, cost control, and asset management.

Conclusion

Ever Reach Group (Holdings) Company Limited’s profit warning for FY2025 highlights significant ongoing challenges, including a notable decline in revenue, continued losses, and further asset impairments amid a weak Chinese property market. These developments are highly price sensitive and warrant caution for current and prospective investors. The situation remains fluid, with full audited results and further details to be disclosed by March 2026.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions related to Ever Reach Group (Holdings) Company Limited. The information is based on unaudited preliminary disclosures and may be subject to change.

View EVER REACH GP Historical chart here