Wing Lee Properties (00864) issues profit warning, expected net loss for the first half of the year to be around HK$164 million to HK$166 million.

WING LEE PPT (00864) announced that the group is expected to incur a net loss of approximately HK$164 million to HK$166 million in the first half of 2025, compared to a net loss of approximately HK$61.3 million in the same period of 2024. This is mainly due to the higher decrease in the fair value of the group's investment properties in the first half of 2025, compared to a lower decrease in the same period of 2024, reflecting the overall market conditions in the Hong Kong commercial retail and residential investment property markets during the review period. The expected decrease in the fair value of the group's investment properties in the first half of 2025 is approximately HK$169 million to HK$171 million (compared to a decrease of approximately HK$67.9 million in the same period of 2024). Nevertheless, as the decrease in the fair value of the group's investment properties is a non-cash item and the group's business is focused on long-term investment and property leasing, the Board of Directors expects that it will not have any significant adverse impact on the group's operations and cash flow. Excluding the impact of the decrease in the fair value of the group's investment properties mentioned above, the group is expected to achieve a net profit in the first half of 2025, in line with the same period of 2024. However, the profit is not sufficient to offset the difference in the net change in the fair value of the group's investment properties between the first half of 2025 and the same period of 2024. The group also expects to incur other comprehensive expenses of approximately HK$30 million to HK$32 million in the first half of 2025, compared to approximately HK$24.2 million in the same period of 2024. This is mainly due to the decrease in the fair value of the fund and fund properties in the first half of 2025. The unrealized valuation changes will not be reclassified to the income statement, as they are non-cash items, and will not affect the group's daily operations and cash flow. The total comprehensive expenses for the first half of 2025 are expected to be approximately HK$194 million to HK$198 million, compared to approximately HK$85.5 million in the same period of 2024.