Hebei Construction Group Issues Significant Profit Warning for FY2025

Key Points from the Announcement

• Hebei Construction Group Corporation Limited (Stock Code: 1727) has issued a profit warning for the financial year ended 31 December 2025.
• Expected Net Loss: The Group anticipates a net loss in the range of RMB 550 million to RMB 700 million for FY2025. This is in stark contrast to the previous year’s net profit of approximately RMB 159 million.
• Main Reason: The loss is primarily attributed to an increase in collective bad debt provisions for accounts receivable and contract assets, due to a real estate market environment that fell below expectations.
• Financial Accounts: The figures are based on a preliminary review of unaudited consolidated management accounts for the year ended 31 December 2025.

Implications for Shareholders

• This profit warning is highly price sensitive. The transition from a notable profit in 2024 to a substantial loss in 2025 could have a material impact on the Company’s share price.
• Increase in Bad Debt Provisions: The rise in provisions signals potential collection issues and greater credit risk in the Company’s receivables, likely reflecting broader challenges in the real estate and construction sectors.
• No Cancellation of Major Contracts: The Board has emphasized that, as of the date of the announcement, there have been no cancellations of major contracts. The Group’s operations remain stable with a healthy liquidity position.
• Management Response: The Company is implementing stricter risk control management, limiting market entry, focusing on projects that guarantee profits and stable cash flow, and intensifying efforts to collect outstanding receivables. Projects requiring significant advance funding will be strictly controlled.
• Final Financial Results Pending: The final audited results for FY2025 may differ from the figures presented in this announcement. Investors should await the official release of audited results for precise details.

Board and Leadership

The announcement was authorized by the Board of Directors and signed by Chairman and Executive Director, Mr. LI Baozhong. The Board consists of executive, non-executive, and independent non-executive directors, ensuring oversight and governance during this challenging period.

Investor Guidance

• Exercise Caution: Shareholders and potential investors are strongly advised to exercise caution when dealing in the shares of Hebei Construction Group Corporation Limited amidst this uncertainty.

Disclaimer: The information above is based on the Company’s preliminary unaudited figures and management accounts. Actual audited results may differ. This article is for informational purposes only and does not constitute investment advice. Investors should make decisions based on their own judgment and consult professional advisors if necessary.

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