China Wan Tong Yuan (Holdings) Limited Issues Profit Warning: Turnaround from Profit to Loss for FY2025

Key Highlights

• Profit Warning Issued: China Wan Tong Yuan (Holdings) Limited (“the Company”) has announced a significant profit warning for the financial year ended 31 December 2025.
• Estimated Loss: The Company expects to report a consolidated loss and total comprehensive expense attributable to owners ranging from approximately RMB11 million to RMB14 million for FY2025. This is a sharp reversal compared to the profit and total comprehensive income of approximately RMB9.85 million reported for FY2024.

Factors Contributing to the Loss

1. Macroeconomic Impact & Declining Demand: The Group experienced decreased sales revenue due to lower unit prices for burial plots and reduced demand for funeral services, reflecting prudent consumption by customers amid challenging macroeconomic conditions.
2. Increased Taxation Costs: Several subsidiaries faced higher taxation expenses, including additional re-assessed value-added tax (VAT) and surcharges for historical periods, following notices from the tax authorities. There was also clarification of different tax rates applicable to various funeral services, further impacting taxation costs.
3. Decrease in Fair Value of Financial Assets: The Group recorded a decline in the fair value of financial assets at fair value through profit or loss.
4. Potential Impairment of Non-Current Assets: The Company may recognize impairment losses on certain non-current assets, further contributing to the expected loss.
5. Non-Recurring Events: The loss for FY2025 is primarily attributed to non-recurring events, such as the additional re-assessed VAT and surcharges, losses from fair value adjustments on financial assets, and potential asset impairments.

Operational Impact & Strategic Response

• Core Business Remains Unaffected: Despite the loss, the Company emphasized that these non-recurring events did not affect the operation of its core businesses.
• Strategic Focus: The Group will continue to develop the burial industry through three main strategies:
  • Deep geographical exploration
  • Cost refinement
  • Ecosystem building
• Operational Management: The Company aims to optimize operational management, maintain healthy cash flow and financial structure, and build a stable and sustainable enterprise.

Important Information for Shareholders and Investors

• Results Not Yet Finalized: The consolidated results for FY2025 are still being finalized. The information disclosed is based on unaudited management accounts and preliminary review by the Board. Actual results may differ from estimates.
• Result Announcement Timeline: The Company expects to publish its audited results for FY2025 by the end of March 2026, in accordance with Hong Kong Stock Exchange Listing Rules.
• Advice for Shareholders: Shareholders and potential investors are strongly advised to exercise caution when dealing in the shares of the Company, as the significant expected loss may impact the share price.

Board and Management

• Chairman: Ms. Zhao Ying (Non-Executive Director)
• Executive Directors: Ms. Li Xingying, Ms. Wang Wei, Mr. Yang Yun
• Independent Non-Executive Directors: Mr. Cheung Ying Kwan, Dr. Wong Wing Kuen Albert, Mr. Choi Hon Keung Simon

Conclusion

The announcement of a profit warning and expected turnaround from profit to loss for FY2025 is a material and potentially price-sensitive development for China Wan Tong Yuan (Holdings) Limited. The underlying causes—macroeconomic headwinds, increased taxation, falling asset values, and possible asset impairments—pose significant challenges. Investors and shareholders should closely monitor forthcoming announcements and exercise heightened caution in trading the Company’s shares.

Disclaimer

This article is based on preliminary and unaudited information disclosed by China Wan Tong Yuan (Holdings) Limited. The actual results may differ from estimates provided. Investors and shareholders should refer to the Company’s official audited results and consult professional advisors before making any investment decisions. The author assumes no responsibility for any actions taken based on this news report.

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