SCHOLAR EDU (01769) issues profit warning, expecting the net loss attributable to owners of the company for 2025 to be between 70 million and 80 million yuan, turning from profit to loss year-on-year.

SCHOLAR EDU (01769) announced that the board expects the group to incur a net loss attributable to owners of the company of RMB 70 million to RMB 80 million in 2025 (2014: a net profit attributable to owners of the company of RMB 145.6 million). Excluding share-based compensation expenses, the group expects to incur an adjusted net loss attributable to owners of the company of RMB 40 million to RMB 50 million in 2025 (2014: an adjusted net profit attributable to owners of the company of RMB 175.7 million). The announcement stated that the expected losses are mainly due to the group's strengthened strategic business development and exploration of new businesses, including expanding its business coverage and opening new literacy learning centers in more cities. Since these newly opened literacy learning centers are still in the early stages of operation in 2025, the generated income is limited. However, compared to the generated income, direct operating costs (such as employee expenses and benefits, amortization, depreciation, utility and property management fees) are still at a high level, negatively impacting the group's overall profitability. In addition, due to default by counterparties, several financial asset investments of the group (amounting to approximately RMB 30 million) have not been redeemed upon maturity, resulting in a loss of fair value for these assets.