HUA YIN INTL H (00989) issues profit warning, expecting the mid-term net loss attributable to shareholders to widen by not less than approximately 590 million yuan compared to the same period last year.

HUA YIN INTL H(00989) announced that, compared to a net loss attributable to the owners of the company of approximately RMB 79.90 million for the six months ended September 30, 2023 (corresponding mid-term period), the Group expects to incur a net loss attributable to the owners of the company of not less than approximately RMB 590 million for the six months ending September 30, 2024 (current mid-term period). The announcement stated that although the Group has recognized property sales revenue and gross profit resulting from the completion and delivery of the Guan Ze Lan Ting Phase 2A property project in Baishan City during the current mid-term period, increasing from approximately RMB 44 million and RMB 15.80 million in the corresponding mid-term period to approximately RMB 132 million and RMB 20.70 million in the current mid-term period, the Group expects the net loss for the current mid-term period to mainly be due to further impairment of developing properties, amounting to approximately RMB 565 million after deducting deferred tax items. This impairment relates to the cultural tourism project named Guan Ze Fu Song Town International Resort in Fu Song County (Fu Song Property Project). During the current mid-term period, the Board of Directors believes it is more appropriate for the Group to divest the Fu Song Property Project due to (including) (1) the bleak prospects of the Fu Song Property Project affected by the macroeconomic environment, (2) debts related to the development of the Fu Song Property Project, and (3) future funding needs of the Fu Song Property Project. Therefore, the Group management revaluated the latest net realizable value of developing properties in the Fu Song Property Project based on the evaluation as of September 30, 2024, and applied a discount rate for the planned short-term sale of the Fu Song Property Project, resulting in an estimated impairment loss of approximately RMB 638 million.