HK Stock Market Move | MEIDONG AUTO (01268) rose by nearly 10%, with a full-year loss of approximately 2.3 billion yuan after provisioning goodwill. The company stated that the cash flow is healthy and considering returning profits to shareholders.

MEIDONG AUTO (01268) rose nearly 10%, up 6.64% as of press time, at 2.25 Hong Kong dollars, with a transaction value of 38.1555 million Hong Kong dollars. On the news front, MEIDONG AUTO recently issued a profit warning, stating that the company expects a loss attributable to equity shareholders of approximately 2.3 billion yuan in 2024 and a profit attributable to equity shareholders of approximately 100 million yuan in 2023. The shift from profit to loss is mainly attributed to the price war in the automotive market in the second half of the year and the impact of macroeconomic factors. The company will confirm non-cash goodwill and distributor rights impairment of approximately 2.8 billion yuan for underperforming cash-generating units in the second half of 2024, in addition to a impairment of approximately 200 million yuan in the first half of 2024, totaling approximately 3 billion yuan for the full year. MEIDONG AUTO also disclosed that the group's net cash and cash equivalents at the end of 2024 increased compared to the end of 2023, with net cash inflows from operating activities. The group's cash flow is healthy and it has already fully redeemed the $1.873 billion convertible bonds on January 13, 2025. The board of directors believes that the overall financial condition of the group is sound and will continue to maintain a prudent financial strategy. The company will consider distributing dividends, repurchasing shares, or other forms to bring returns and value to shareholders after careful consideration of dividend policies, funding needs, and other relevant factors.