New Century Healthcare Issues Profit Warning for FY2025

New Century Healthcare Holding Co. Limited (Stock Code: 1518) has issued a significant profit warning, alerting shareholders and potential investors to a major expected turnaround in financial performance for the year ended December 31, 2025.

Key Points from the Profit Warning

• Expected Loss for FY2025: The Group anticipates a net loss attributable to owners of the Company in the range of RMB110 million to RMB125 million for FY2025.
• Comparison with Previous Year: This marks a sharp reversal from the previous year (FY2024), in which the Group reported a net profit of approximately RMB47.4 million.
• Primary Reasons for the Loss:
  • Decrease in Revenue: The Group experienced a significant reduction in demand for its core services, specifically in pediatric, obstetric, and gynecologic segments.
  • Impairment Losses: The Group expects to record impairment losses on certain goodwill and other long-term assets, further impacting the bottom line.
  • Write-down of Deferred Tax Assets: Additional negative impact is anticipated due to the write-down of deferred tax assets.

Potential Price-Sensitive Implications

• Major Financial Reversal: The swing from a net profit to a substantial net loss may lead to a reassessment of the Group’s valuation and could significantly affect the share price.
• Sector Risks: The decreased demand in pediatric, obstetric, and gynecological services may indicate broader sectoral or consumer sentiment risks, or company-specific operational challenges.
• Asset Impairments: The impairment of goodwill and other assets raises questions about the historical investments and the current value of assets on the balance sheet.
• Tax Implications: The write-down of deferred tax assets could negatively affect the company’s future tax position and profitability.
• Ongoing Uncertainty: The annual results for FY2025 are still being finalized and have not been reviewed by non-executive directors or the auditors, meaning the final reported figures may differ, introducing additional uncertainty.

Important Information for Shareholders and Investors

• Final Results Pending: Shareholders and investors should note that the information released is preliminary and unaudited. The final, audited annual results are expected to be published by the end of March 2026.
• Caution Advised: The Board has explicitly advised caution when dealing in the Company’s shares given the current uncertainty and possibility of further adjustments to the results.
• Leadership: The announcement was authorized by Mr. Jason Zhou, Chairman, Executive Director, and Chief Executive Officer, with the Board comprising a mix of executive, non-executive, and independent non-executive directors.

Conclusion

This profit warning from New Century Healthcare represents a material development that is likely to be price-sensitive. The anticipated swing from profit to loss, combined with asset impairments and a reduction in core service demand, poses significant risks for current and prospective investors. Shareholders are strongly encouraged to review the forthcoming annual results in detail and exercise heightened caution in any share dealings until the financial outlook becomes clearer.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should exercise their own judgment and consult professional advisers before making any investment decisions. The final audited results may differ from the figures discussed above.

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