China Travel International Issues Profit Warning: Key Details for Investors

Summary of the Announcement

China Travel International Investment Hong Kong Limited (“CTIIHK” or “the Company”) has issued a profit warning for the financial year ended 31 December 2025. Based on a preliminary review of unaudited consolidated management accounts, the Group expects to record a loss attributable to shareholders exceeding HK\$250 million, in stark contrast to the profit of HK\$106 million reported for the previous year (2024).

Key Points for Investors

• Major Loss Expected: The Company anticipates a loss of more than HK\$250 million for FY2025, reversing from a profit in FY2024.
• Reasons for the Loss:
  • Impairment Provision: Significant provisions for impairment were made concerning assets in the tourism real estate business.
  • Distribution in Specie: The loss was magnified by the impact of distributing equity interests in associates and related assets as part of the distribution in specie conducted in 2025.
  • Exchange Differences: One-off reclassification of accumulated exchange differences related to the tourism real estate business distribution in specie.
  • Investment Property Valuations: Decrease in fair values of investment properties due to market fluctuations.
• Completion of Distribution in Specie: As of 31 December 2025, the relevant distributions in specie had been completed. The corresponding assets and equity interests in associates are no longer consolidated in the Group’s financial statements.
• Results Not Finalized: The loss estimate is based on preliminary unaudited accounts and has not been reviewed by auditors or the audit committee. Actual results may differ and could be subject to amendments and adjustments.

Operational and Strategic Updates

• Sound Core Operations: Despite the loss, the overall operation of the Group remains robust and intact.
• Growth in Scenic Spots and Transportation: From January to February 2026, the combined number of visitors to scenic spots and resort destinations, as well as passenger transportation volumes, increased compared to the same period last year.
• Stable Hotel Operations: The Group’s hotel operations continued their stable development.
• New Growth Points: Recent acquisitions (Jilin Songhua Lake International Resorts Company Limited and China Travel (Beijing) Bingxue Sports Development Co., Ltd.) have contributed new growth engines to the Group since October 2025.
• Business Optimization: The Company will focus on steady growth, optimizing business layout and operations, and striving for improved shareholder returns.

Potential Impact on Shareholders and Share Price

• Price Sensitive Information: The expected substantial loss and the reasons behind it are material and could significantly impact the Company’s share price.
• Uncertainty in Results: As the results are not audited and may be subject to change, investors should anticipate possible volatility.
• Caution Advised: Shareholders and potential investors are urged to exercise caution when dealing in the Company’s shares.
• Upcoming Disclosure: Final audited results and further details will be disclosed in the annual results announcement scheduled for 31 March 2026.

Board Composition

The Board comprises three executive Directors (Mr. Wu Qiang, Mr. Feng Gang, and Mr. Li Pengyu), three non-executive Directors (Mr. Tsang Wai Hung, Mr. Zheng Jiang, and Mr. Fan Zhishi), and three independent non-executive Directors (Mr. Song Dawei, Ms. Fang Xuan, and Mr. Qian Jiannong).

Conclusion

This announcement reflects a significant turnaround in CTIIHK’s financial performance for FY2025, primarily due to strategic restructuring and market-related asset adjustments. While core operations remain strong and the Group is actively pursuing new growth opportunities, the expected loss and its underlying causes are price sensitive and highly relevant to investors. The market can expect further clarity in the upcoming annual results announcement.

Disclaimer: This article is based on a preliminary profit warning announcement and unaudited management accounts. Actual financial results may differ. Investors are strongly advised to consult official disclosures and exercise caution when making investment decisions.

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