HOMELAND ITL (03798) issues a profit warning, expecting an annual net loss of approximately RMB 75 million to RMB 85 million, compared to a profit in the previous year.

HOMELAND ITL (03798) has released an announcement, expecting the group's revenue for the year ending December 31, 2024 to be approximately RMB 1.381 billion, a decrease of about 22% compared to the revenue of approximately RMB 1.78 billion for the year ending December 31, 2023. It is also expected that the group will incur a net loss of approximately RMB 75-85 million for the year ending December 31, 2024, while the group had a surplus of approximately RMB 440 million for the year ending December 31, 2023. The board of directors believes that the aforementioned decrease is attributed to: (i) proactive adjustments to the group's commercialization strategy during the reporting period, leading to a decline in revenue from certain games and an overall decrease in revenue year-on-year; (ii) an increase in distribution channel costs and joint operation costs for the group, resulting in a significant increase in sales costs; (iii) in order to maintain market share, the group increased its marketing efforts during the reporting period; and (iv) bad debts and losses incurred by certain associated companies, leading to a further decrease in the group's surplus during the period and resulting in losses.