BAIOO Family Interactive Limited Issues Profit Warning for FY2025

Key Highlights from the Profit Warning Announcement

• Significant Widening of Losses: BAIOO Family Interactive Limited expects to record a net loss attributable to shareholders in the range of RMB72.0 million to RMB79.5 million for the year ended 31 December 2025, a substantial increase from the RMB28.0 million net loss recorded for the previous year (2024).
• One-Off Non-Cash Loss: The loss is mainly due to a concentrated loss from a specific investment project, which has resulted in an aggregate loss of approximately RMB45 million. This includes both impairment loss on a long-term equity investment and impairment of related unrecoverable prepayments.
• Investment Project Failure: The specific investment was in a game company that launched its core product during 2025. The product underperformed, resulting in an unexpected rapid decline in revenue, operational difficulties, and eventual cessation of operations for that company.
• One-Off Impact: While the impairment is non-cash in nature, it materially affects the Group’s reported net profit for the year.

Implications for Shareholders and Investors

• Price-Sensitive Information: The significant increase in net loss, especially due to a one-off investment impairment, is a material event and could negatively impact the company’s share price in the short term.
• Business Fundamentals Remain Robust: Despite the loss, BAIOO emphasizes that its core business operations and research & development (R&D) capabilities remain strong. The company’s cash flow position is healthy, and several long-standing core products have generated stable revenues, with some even achieving significant growth in 2025.
• Strategic Focus and Recovery Prospects:
  • The Group is actively focusing resources on the research, development, and publishing of proprietary products, a move expected to underpin business recovery in 2026.
  • Upcoming Product Launches: Two new self-developed and self-published games are scheduled for official launch in 2026. Notably, one of these games has shown exceptional performance in recent tests, with core metrics such as user retention rate exceeding internal expectations and reaching top-tier industry standards. The other new title has also performed steadily.
  • Management expects these launches to drive revenue recovery and a significant improvement in profitability from 2026 onwards.
  • Continued high investment in R&D is aimed at enhancing proprietary game development capabilities and user experience, which is expected to support long-term performance and sustainable development.
• Ongoing Review: The financial information in the announcement is based on preliminary unaudited management accounts and is subject to finalization and audit review. The audited annual results are expected to be published by the end of March 2026.

Directors and Management Statement

The Board of Directors, led by Chairman and CEO Mr. DAI Jian, reiterates its confidence in the company’s strategic direction and future prospects. The Board believes that successful launches of new products, combined with ongoing R&D investments, will enhance revenue and profitability in the coming years.

Investor Advisory

Shareholders and potential investors are strongly advised to exercise caution when dealing in the securities of BAIOO Family Interactive Limited, given the material nature of the disclosed loss and the company’s ongoing financial review process.

Disclaimer: This article is based on preliminary, unaudited financial information disclosed by BAIOO Family Interactive Limited and is for informational purposes only. Investors should review the company’s official audited results and consult their financial advisors before making any investment decisions. The information herein does not constitute investment advice or an offer to buy or sell securities.

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