Weigang Environmental Technology Holding Group Limited Issues Significant Profit Warning for FY2025

Key Points for Investors

• Expected Net Loss for FY2025: The Group forecasts a net loss in the range of RMB76.0 million to RMB78.0 million for the year ended 31 December 2025, widening from RMB55.3 million in FY2024.
• Loss Attributable to Owners: Loss attributable to owners is expected to be RMB63.0 million to RMB65.0 million, up from RMB48.6 million in FY2024.
• Impairment Losses: The projected losses are primarily driven by substantial impairments:
  • Jiangmen Pyrolysis Project: An impairment loss of RMB17.0 million to RMB18.0 million has been accrued, following a valuation by an independent third-party. This is due to lengthy construction, extended R&D cycles, ongoing technical upgrades, and concerns about the project’s commercial prospects.
  • Xinjiang Tiansheng Acquisition Goodwill: An impairment loss of RMB14.0 million to RMB15.0 million has been recognized on the goodwill from this acquisition, again due to commercial prospect concerns and a revised business plan.
  • Deferred Tax Asset Reversal: The Group expects to reverse previously recognized deferred tax assets, amounting to RMB9.0 million to RMB10.0 million.
• Nature of Announcement: The financials are based on a preliminary review of unaudited management accounts, and are not yet confirmed, reviewed, or audited by external auditors. Final figures may be subject to adjustment.
• Timing of Annual Results: Detailed financial information will be disclosed in the annual results announcement, expected by 26 March 2026.
• Board Composition: The Board currently comprises three executive directors and three independent non-executive directors.

Price Sensitive Information for Shareholders

• Material Increase in Net Loss: The expected increase in net loss for FY2025 compared to FY2024 is substantial. This could signal ongoing operational and valuation challenges and is likely to be considered price sensitive.
• Impairment of Major Assets: Significant impairments, particularly on the Jiangmen pyrolysis project and Xinjiang Tiansheng goodwill, reflect management’s concerns about future commercial viability. These impairments may reduce investor confidence in the Group’s asset base and growth prospects.
• Deferred Tax Asset Reversal: The reversal of deferred tax assets, which had previously contributed positively to balance sheet strength, indicates revised expectations for profitability and future taxable income.
• Potential Share Price Impact: The combination of increased losses, asset impairments, and tax asset reversals are likely to negatively affect investor sentiment and may lead to share price volatility. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

Additional Details

• The impairment losses are based on assessments by independent third-party valuers, reflecting updated project valuations and revised business plans.
• The Jiangmen pyrolysis project, a major development for the Group, has faced ongoing technical upgrades and lengthy construction cycles, raising concerns about its future commercial prospects.
• The goodwill impairment on the Xinjiang Tiansheng acquisition suggests management is re-evaluating the strategic value of acquired operations.
• The Board emphasizes that these figures are preliminary and have not been audited or reviewed by the Company’s auditors.
• The annual results announcement, with confirmed financial statements, is expected by 26 March 2026.
• The Board encourages caution for shareholders and potential investors considering trading the Company’s shares.

Disclaimer

This article is based on a profit warning announcement issued by Weigang Environmental Technology Holding Group Limited. The information is preliminary and unaudited, subject to further review and adjustment. Investors should not rely solely on this article for investment decisions and are advised to consult the official annual results announcement and seek independent financial advice as appropriate. The contents herein are for informational purposes only and do not constitute an offer or solicitation to buy or sell securities.

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