Lai Sun Garment (International) Limited Issues Substantial Profit Warning for H1 FY2026

Key Highlights from the Profit Warning Announcement

• Significant Increase in Losses: Lai Sun Garment (International) Limited (“the Company”) has announced that, based on preliminary unaudited consolidated management accounts, the loss attributable to shareholders for the six months ended 31 January 2026 is expected to reach between HK\$600 million to HK\$700 million. This marks a sharp increase compared to a loss of approximately HK\$123 million recorded in the corresponding period last year.
• Principal Causes of Increased Losses:
  1. Lai Fung Group’s Losses: The Group incurred losses from the sale of an accommodation tower and a significant write-down of properties in Hengqin Novotown Phase II.
  2. Fair Value Losses on Investment Properties: The Group suffered further losses due to negative fair value adjustments in its investment property portfolio.
  3. Fair Value and Impairment Losses on Joint Venture Properties: Additional losses were recorded as a result of fair value adjustments and impairment losses on properties owned through joint ventures.
• Impact on Shareholders: Shareholders and potential investors are specifically advised to exercise caution in trading the Company’s shares, as the expected losses are considerably larger than previously reported, and may have a material, negative impact on the share price.

Detailed Analysis and Business Segments Affected

The Company’s diversified operations include property investment, property development, hotel and restaurant operations, film and TV production and distribution, music production, concert management, artiste management, cinema operation, as well as investments in cultural, leisure, and entertainment facilities. The losses announced primarily stem from the property division, particularly the operations of Lai Fung Holdings Limited and its subsidiaries.

The Group’s investment properties and joint ventures also suffered fair value write-downs and impairments, compounding the financial impact. The sale of assets in Hengqin Novotown Phase II not only failed to offset losses but also required significant write-downs, indicating ongoing challenges in the Group’s property development and hospitality segments.

Timing and Next Steps

• Audit Status: The figures are based on management’s preliminary assessment of unaudited accounts for the period. The results have not yet been reviewed by the audit committee.
• Interim Results Release: The unaudited interim results are scheduled for publication on 27 March 2026.
• Board Composition: The Board currently comprises six Executive Directors and four Independent Non-executive Directors.

Potential Impact on Share Price

The magnitude of the expected losses is likely to be viewed negatively by the market. The combination of asset sales at a loss, significant property write-downs, and impairment charges on joint ventures all point towards operational and market headwinds, particularly in the Group’s property investment and development segments. Investors should be aware that share price volatility is likely in the short term, and further downside risk may exist until the Group demonstrates a turnaround or clearer prospects for its asset portfolio.

Shareholders’ Advisory

All shareholders and potential investors are strongly advised to exercise caution when dealing in the Company’s shares, given the substantial increase in losses and the possibility of further adverse developments pending the formal release of interim results.

Disclaimer: This article is based on the Company’s official announcement dated 20 March 2026. The information is derived from preliminary unaudited management accounts and is subject to revision. Investors should not rely solely on this article for investment decisions and are encouraged to review the formal interim results and consult with professional advisors as appropriate.

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