Royale Home Holdings Issues Significant Profit Warning for FY2025

Key Points Investors Should Know

• Expected Loss for FY2025: Royale Home Holdings Limited (“the Company”, Stock Code: 1198) has issued a profit warning, announcing that it anticipates a substantial loss for the year ended 31 December 2025. The estimated loss is projected to be between RMB580 million and RMB730 million. This marks a significant increase compared to the loss of approximately RMB348 million recorded for the year ended 31 December 2024.
• Unaudited Figures: The figures provided are based on the Board’s preliminary review of the unaudited consolidated management accounts for FY2025. These results have not yet been reviewed or audited by the company’s independent auditors or audit committee.
• Key Factors Contributing to the Loss:
  • Decline in Operating Profit: The Company’s furniture products segment experienced a drop in operating profit, largely due to a challenging macroeconomic environment and softened overall market demand.
  • Gross Profit Reduction: There was a notable decrease in gross profit from the home furnishing business, attributed to a cyclical adjustment within the real estate sector.
  • Increased Provisions: The Group made higher general provisions on trade receivables, other receivables, and inventories, reflecting cautious risk management amid economic uncertainty.
  • Revaluation Loss: The Company reported a revaluation loss on its investment properties, impacting its bottom line.
  • Share of Losses from Associates: There was an increase in the Company’s share of losses from its associates.
  • Rising Finance Costs: The Company also faced higher finance costs during the period.
• Potential Price Sensitivity: The magnitude of the anticipated loss is considerably greater than the previous year and includes multiple negative factors affecting the Company’s financials. This update is likely to be price sensitive and could have a direct impact on Royale Home Holdings’ share price.
• Investors Cautioned: The Board explicitly advises shareholders and potential investors to exercise caution when dealing in the Company’s shares until the audited results are released.
• Final Results Timeline: The audited annual results for the year ended 31 December 2025 are expected to be published in March 2026.

Board Composition

As of the date of this announcement, the Board consists of one executive Director (Mr. Lin Ruhai, who also serves as Chairman and CEO), four non-executive Directors (Mr. Wu Zhongming, Mr. Tao Ying, Ms. Yang Ying, and Mr. Yan Weihao), and three independent non-executive Directors (Mr. Lau Chi Kit, Mr. Yue Man Yiu Matthew, and Mr. Chan Wing Tak Kevin).

Important Considerations for Shareholders

• The announcement constitutes inside information under Hong Kong’s Securities and Futures Ordinance and is being made to comply with regulatory requirements.
• The profit warning and the significant projected loss, especially the increased provisions and revaluation losses, are material developments that could impact investor sentiment and the Company’s market valuation.
• Shareholders and potential investors are strongly advised to await the full announcement of the Group’s audited results in March 2026 and to remain cautious in their investment decisions.

Disclaimer

This report is based on the Company’s latest profit warning announcement and contains forward-looking statements based on unaudited management accounts and information currently available to the Board. Actual results may differ from the estimates provided. This article is for informational purposes only and does not constitute investment advice. Investors should exercise caution and consult their professional advisers before making any investment decisions relating to Royale Home Holdings Limited.

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