Key Points from the Announcement

• Significant Loss Expected: Powerlong Real Estate Holdings Limited (“Powerlong”) has issued a profit warning for the financial year ended 31 December 2025. The Group expects to report a loss ranging from RMB6,600 million to RMB7,000 million, a sharp increase compared to the loss of RMB5,498 million recorded in 2024.
• Core Losses to Increase: Core losses attributable to owners (excluding certain fair value and revaluation items) are estimated at RMB3,400 million to RMB3,800 million, compared to RMB3,084 million in 2024.
• Reasons for Deterioration: The worsening financial performance is mainly due to:
  • Ongoing severe operating environment in the Chinese real estate sector.
  • Prudence-driven impairment provisions for property projects.
  • Decrease in fair value of investment properties.
  • Reduced share of results from joint ventures and associates.
• Accounting Note: Core losses exclude fair value gains/losses on investment properties, revaluation gains/losses on completed properties transferred to investment properties, and foreign exchange gains/losses on financing activities.
• Preliminary Figures: The numbers are based on unaudited management accounts and may be subject to adjustments. Final audited results will be published by the end of March 2026.

Implications for Shareholders and Investors

• Material Price Sensitivity: The expected increase in losses—both headline and core—represents a material deterioration in Powerlong’s financial position. Such a large loss may have a direct negative impact on share price and investor sentiment.
• Sector Risks: The announcement underscores ongoing challenges in the Chinese real estate sector. Investors should be aware that impairment provisions and falling property values may persist, impacting future profitability.
• Uncertainty in Final Results: The figures are preliminary and unaudited. They may change after audit review, adding further uncertainty around the Group’s financial outlook.
• Caution Advised: The Board specifically advises shareholders and potential investors to exercise caution when dealing in the securities of the Company.
• Upcoming Results Announcement: The final annual results for 2025 will be announced no later than the end of March 2026. Investors should closely monitor for further updates.

Board and Management Disclosure

The announcement was made under the authority of Mr. Hoi Kin Hong, Chairman of Powerlong Real Estate Holdings Limited. The Board comprises four executive directors, one non-executive director, and four independent non-executive directors.

Conclusion

The profit warning from Powerlong Real Estate Holdings Limited signals continued financial distress and sector-specific challenges. The anticipated increase in losses is likely to be highly price sensitive and may negatively impact the Company’s share value. Shareholders and investors are strongly advised to stay updated and exercise increased caution.

Disclaimer

This article is based on the preliminary unaudited figures and official announcements by Powerlong Real Estate Holdings Limited. Investors should not rely solely on this news for investment decisions and are advised to consult the forthcoming audited results and seek professional advice if needed.

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