Details for Investors and Shareholders

China New City Group Limited (Stock code: 1321) has issued a profit warning for the financial year ended 31 December 2025. The Board has alerted shareholders and potential investors about a substantial swing from profit to loss, driven mainly by a dramatic drop in revenue from its commercial property development business.

The company attributes this downturn to two key factors:

• Completion of the majority of revenue recognition for sales of the IOC Building A2.1 project in FY2024.
• No new projects of similar scale being recognized in FY2025, resulting in a lack of comparable revenue streams.

This has resulted in an anticipated 91% drop in development segment revenue for FY2025.

On a positive note, the property rental segment is expected to deliver a revenue increase of at least 23% compared to FY2024. While this segment is providing stable cash inflow, it is not sufficient to offset the loss from the development business.

The announcement stresses that these projections are based on preliminary unaudited figures and may be subject to further revision. The official annual results will be published on 26 March 2026, after review by the auditor and audit committee.

Potential Impact and Price Sensitivity

This profit warning is highly price sensitive and could have a material impact on the share valuation. Investors should note the following:

• The swing from a substantial profit to a sizable net loss represents a major change in the company’s financial trajectory.
• The significant decline in development revenue indicates that the company may face challenges in replenishing its project pipeline.
• While rental income is increasing, it is not expected to compensate for the loss in development segment, raising concerns about future profitability and cash flow stability.

Shareholders and potential investors are advised to exercise caution when dealing in the shares of China New City Group Limited, as the company’s financial outlook for FY2025 is markedly weaker compared to FY2024.

Corporate Governance Update

As of the date of the announcement, the Board comprises Mr Shi Nanlu, Mr Jin Jianrong, and Ms Chen Jing as executive Directors; Mr Shi Zhongan as non-executive Director; and Mr Xu Chengfa, Mr Lam Yau Yiu, and Mr Yuan Yuan as independent non-executive Directors.

The announcement is signed by Shi Zhongan, Chairperson, and dated 20 March 2026.

Disclaimer

Disclaimer: This article is based on preliminary information released by China New City Group Limited. The financial figures and projections mentioned herein are unaudited and subject to change. Investors are strongly advised to await the official audited results and consult with their financial advisors before making investment decisions. The article does not constitute investment advice.

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