CHINA CHENGTONG (00217) issues profit warning, expecting a year-on-year decrease in net profit after tax of around 43%-46% to HK$37-39 million.

CHINA CHENGTONG (00217) announced that the group is expected to achieve a comprehensive profit after tax of approximately HK$37 million to HK$39 million in the fiscal year 2024, a decrease of approximately 43% to 46% compared to the fiscal year ending December 31, 2023. The group's financial performance in fiscal year 2024 is mainly influenced by factors such as interest rate fluctuations, global inflation, geopolitical tensions, and economic growth. In fiscal year 2024, the group adopts a more conservative approach to seize market opportunities and more cautiously arranges new leases. Revenue from leasing categories decreased by approximately HK$166 million or 28% compared to fiscal year 2023. Therefore, the group's comprehensive gross profit and net interest income decreased by approximately HK$85 million or 29% on a yearly basis in fiscal year 2024. In addition, the fair value of the group's investment properties continued to be impacted by the overall decline in the real estate market in the People's Republic of China in fiscal year 2024, resulting in a loss of fair value of investment properties of over HK$7 million compared to fiscal year 2023. However, some of these impacts were offset by a decrease of approximately HK$48 million in impairment losses under the expected credit loss model for finance lease receivables and loans receivable and a reduction of approximately HK$5 million in finance costs.