Zhenro Properties Group Limited Issues Significant Profit Warning for FY2025

Key Points from the Announcement

• Massive Expected Loss:
  Zhenro Properties Group Limited has issued a profit warning, revealing that it expects to record a substantial loss attributable to owners of the parent of approximately RMB17,000 million to RMB18,000 million for the year ended 31 December 2025. This is a sharp increase compared to the loss of RMB6,830 million recorded in FY2024.
• Core Loss Also Worsening:
  The company projects a core loss (excluding non-cash items like impairment losses, fair value changes, and exchange gains/losses) of RMB5,000 million to RMB6,000 million for FY2025, compared to RMB3,178 million in FY2024.
• Factors Driving the Loss:
  • Decline in Real Estate Demand: The Chinese real estate sector faces weakening demand, resulting in lower project selling prices and gross profit margins.
  • Impairment Provisions: Increased provisions for impairment of properties under development, completed properties held for sale, and other assets and financial assets have impacted the results.
  • Rising Financing Costs: There has been an increase in non-capitalized financing interest.
  • Decrease in Investment Property Values: The fair value of investment properties has declined for FY2025.
• Uncertainty in Numbers:
  The figures released are preliminary and based on unaudited management accounts. They may be subject to further adjustments after audit and review.
• Publication of Annual Results:
  The official annual results announcement for FY2025 is scheduled for 27 March 2026.

Important Information for Shareholders and Potential Investors

• Price Sensitivity:
  The announcement contains price-sensitive information. The magnitude of expected losses—almost triple the prior year—could significantly impact investor sentiment and the share price.
• Risk Factors:
  • The worsening financial performance highlights challenges in the Chinese real estate market and the company’s vulnerability to sector-wide declines.
  • Increased impairment provisions may signal further asset quality issues.
  • Rising financing costs suggest liquidity pressures and higher debt burdens.
  • The unaudited nature of the numbers adds uncertainty—final figures could be even worse.
• Board Advisory:
  The Board strongly advises shareholders and potential investors to exercise caution and to not place undue reliance on this preliminary information when dealing in the company’s securities. Professional financial advice is recommended.

Leadership and Disclosure

• The announcement was authorized by Chan King Tak, Chairman of the Board, and lists the current executive, non-executive, and independent non-executive directors.

Conclusion

Zhenro Properties Group Limited’s profit warning signals deepening financial troubles and continued sector pressure for Chinese real estate. The anticipated losses for FY2025 are significant, and shareholders should be aware of the potential for further negative developments as the company navigates a challenging market environment.

Disclaimer

This article is based on preliminary unaudited figures and information released by Zhenro Properties Group Limited. Investors are urged to await the official audited results and seek independent financial advice before making any investment decisions. The information herein is not a recommendation to buy or sell any securities.

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