FLOWING CLOUD (06610) issues a profit warning. It is expected to incur a pre-tax loss of approximately 3.63 billion yuan in the fiscal year 2025, representing a significant increase year-on-year.

FLOWING CLOUD (06610) announced that the Group expects to incur a pre-tax loss of no less than approximately RMB 363 million for the year ending on December 31, 2025, a significant increase compared to the pre-tax loss of approximately RMB 44.85 million for the year ending on December 31, 2024 (FY 2024). The increase in pre-tax loss is mainly attributed to various key factors, including, trade receivables impairment losses increasing significantly, amounting to no less than approximately RMB 110 million, an increase of approximately RMB 93 million compared to FY 2024. The final amount of impairment will be comprehensively assessed by independent valuers based on the recoverability of the receivables in accordance with applicable accounting standards, and determined by the Company's auditors after review; an increase in sales and distribution expenses, amounting to no less than approximately RMB 130 million, an increase of approximately RMB 42 million compared to FY 2024. This change is mainly due to an increase in marketing expenses from third-party service providers, reflecting the Company's efforts to strengthen the launch and promotion of the Group's services and platforms; and an increase in research and development expenses, amounting to no less than approximately RMB 230 million, an increase of approximately RMB 146 million compared to FY 2024. This increase is mainly attributed to a significant increase in investment in expanding the technical reserves of various research and development projects of the Group.