Financial Street Holdings (000402.SZ) announces a forecasted net loss of 9 to 12 billion yuan for the year 2024.

Financial Street Holdings (000402.SZ) released its performance forecast for 2024, expecting a net loss attributable to shareholders of the listed company of 9 to 12 billion yuan for the full year. During the reporting period, the company expects a negative net profit attributable to shareholders of the listed company, with the loss amount exceeding 10% of the audited net assets at the end of 2023. The main circumstances are as follows: 1. In 2024, the company's real estate development business adopted various sales strategies, including adjusting sales prices, to actively promote project sales and achieve a sales contract amount of approximately 19.5 billion yuan, with a net sales turnover of about 11 billion yuan. Due to a decline in gross profit margin of the real estate development sales business, based on the actual progress and settlement progress of projects, the company expects an overall operating net loss of approximately 2.8-3.8 billion yuan. 2. In 2024, the company continued to revitalize existing projects/assets. Firstly, it strengthened government communication and negotiation to achieve the wholesale of the Beijing Fangshan Jinyue County project to the local government as relocation housing and the wholesale of the Suzhou Rongyue Bay office building to the local government, resulting in impairment provisions based on contract prices. Secondly, the company sold the Tianjin Regis Hotel and Huizhou Sheraton Hotel to Beijing Financial Street Holdings (Group) Co., Ltd.'s subsidiary hotel management company, with impairment provisions made based on evaluation results (evaluated value subject to approval by the state asset supervision and administration authorities). The cumulative sales/transfers of the above projects/assets amounted to approximately 2.6 billion yuan, with a turnover of about 0.8 billion yuan in 2024. The company made asset impairment provisions, expecting a net loss attributable to shareholders of approximately 2.1 billion yuan. 3. In 2024, the board of directors approved the "Proposal on the Acquisition of Changjin Company's Equity and Debt, and the Sale of Changrong Company's Equity and Debt," agreeing to list 30% of the shareholding in the affiliated company Beijing Future Science City Changrong Real Estate Co., Ltd. on the Beijing Stock Exchange and participate in bidding for 51% of the shareholding in Beijing Future Science City Changjin Real Estate Co., Ltd. on the Beijing Stock Exchange for cash back (0.3 billion yuan), realizing part of the asset disposal. This is conducive to reducing the company's asset holding, increasing part of the cash flow, and reviving Changjin Company's assets in accordance with market principles. The company confirmed investment losses based on evaluation value (evaluation value subject to approval by the state asset supervision and administration authorities), with an expected net loss attributable to shareholders of approximately 0.9 billion yuan. 4. In addition to the revitalize existing projects/assets in (2), the company made provision for inventory impairment in accordance with accounting standards based on the principle of prudence, expecting a net loss attributable to shareholders of approximately 2.2-3.0 billion yuan. 5. In 2024, individual cooperation projects faced operational difficulties due to the operating reality of joint venture partners, among other reasons. The company made provision for bad debts based on the loans provided to joint ventures according to their shareholding proportion, expecting a net loss attributable to shareholders of approximately 0.5-1.0 billion yuan. 6. In 2024, the company's operations in different cities showed differences. According to the preliminary evaluation results of independent third-party evaluation agencies, the property value in core areas of core cities remained stable, while the fair value of other investment real estate projects changed. The company expects a net loss attributable to shareholders of approximately 0.6-1.3 billion yuan (non-recurring gains and losses) in 2024.