Redsun Services Group Issues Profit Warning for FY2025: Significant Net Loss Expected

Key Highlights

• Expected Net Loss: Redsun Services Group Limited (“Redsun Services” or the “Company”) anticipates recording a net loss of approximately RMB32 million to RMB36 million for the year ended 31 December 2025, a dramatic turnaround from a net profit of RMB15 million in 2024.
• Profit Warning: The announcement constitutes a formal profit warning under Hong Kong Stock Exchange regulations, signaling significant underperformance compared to the previous year.

Details Investors Must Know

The Company attributes this substantial expected loss to two primary factors:

1. Liquidity Difficulties of Real Estate Developer Customers:
   • The Group’s related real estate developer customers have encountered significant liquidity issues, a reflection of broader negative market conditions in China’s real estate sector.
   • This has resulted in a “significant increase in the provision for impairment” of amounts due from related parties, meaning Redsun Services is setting aside more money to cover potential bad debts from these clients.
2. Impairment of Goodwill from Subsidiary Acquisitions:
   • The Group is also recognizing impairment losses on goodwill associated with the acquisition of subsidiaries. This suggests that the acquired businesses are not performing as expected or that their fair value has decreased, necessitating write-downs that impact the income statement.

Other Important Information for Shareholders

• Preliminary Figures: The numbers disclosed are based on unaudited consolidated management accounts, and the final audited results may differ.
• Ongoing Finalization: The Company is still in the process of finalizing its annual results for the year ended 31 December 2025. The figures have not yet been reviewed by the auditor or audit committee.
• Upcoming Results Announcement: The official annual results announcement is expected to be published by the end of March 2026.
• Shareholder Advisory: Shareholders and potential investors are strongly advised to exercise caution when trading in the Company’s securities, as the expected loss is a material adverse development.

Potential Impact on Share Price

This profit warning is a significant negative development for Redsun Services Group. The reversal from a net profit in 2024 to a substantial net loss in 2025, coupled with large impairment provisions and goodwill write-downs, signals deteriorating financial health and heightened credit risks related to the Company’s major customers in the real estate sector. These factors are likely to be viewed unfavorably by the market and could exert downward pressure on Redsun Services’ share price.

Board Statement

The announcement was authorized by Mr. Jia Hongbo, Chairman, with the Board comprising Mr. Jia Hongbo and Mr. Chen Yichun as executive Directors; and Ms. Wang Fen, Mr. Li Xiaohang, and Mr. Zhao Xianbo as independent non-executive Directors.

Disclaimer: The information provided above is a summary of the official profit warning issued by Redsun Services Group Limited. Investors are encouraged to read the full announcement and await the audited annual results before making investment decisions. The actual financial results may differ from the preliminary figures disclosed herein.

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