SUNART RETAIL (06808) issues profit warning, expecting a mid-term shareholders' loss of approximately RMB 140 million.

SUNART RETAIL (06808) announces that for the six months ending on September 30, 2025, the Group is expected to incur a net loss and the company's net loss attributable to owners is estimated to be approximately RMB 110 million to RMB 140 million (unaudited) according to the Hong Kong Financial Reporting Standards. In comparison, the net profit and profit attributable to owners in the same period last year were RMB 186 million and RMB 206 million respectively. The expected net loss and net loss attributable to owners are mainly attributed to: (i) Revenue pressure: Decrease in number of transactions and average selling price of goods due to intensified market competition and weak consumer demand, leading to a decrease in average spending per customer; compounded by the calendar effect of the combination of the Mid-Autumn Festival and National Day, resulting in a double-digit decline in revenue year-on-year; (ii) Profit affected by multiple factors: Cost reduction and efficiency enhancement measures have significantly offset the impact of revenue decline on profit. One-time impacts include a decrease in income during the active adjustment process of the shopping street, approximately RMB 150 million (unaudited) attributed to the optimization of the Central China region, and a decrease in interest income year-on-year, resulting in a decline in profit. Despite the pressure on net profit, the company's net cash is still better than the same period last year. The online B2C business continues to achieve a low unit digit growth, fully reflecting the company's online operational advantages and resilience. Store restructuring performance is in line with expectations, in progress, and still has room for growth. Currently, the company is steadily implementing its 3-year strategic plan, actively improving operations through focusing on product strength enhancement, optimizing supply chain efficiency, store restructuring, creating community lifestyle centers, expanding new stores, and piloting a pre-positioned warehouse model. The company will continue to deepen its strategic execution, fully promote the gradual recovery of business performance.