DIT Group (00726) issues profit warning, expecting a net loss of approximately HKD 1.1 billion to HKD 1.3 billion in 2025.

DIT GROUP (00726) announced that for the fiscal year ending December 31, 2024, the Group's expected net loss attributable to owners amounted to HKD 465 million. However, it is expected that for the fiscal year ending December 31, 2025, the Group will record a net loss attributable to owners ranging between approximately HKD 1.1 billion to HKD 1.3 billion. The expected increase in net loss attributable to owners for the fiscal year ending December 31, 2025, is mainly attributed to the following factors: (1) A decrease in revenue from the sales of prefabricated building units and decoration and landscaping services by approximately 60% to 65%, primarily due to ongoing challenges in the Chinese real estate and construction industry, reduced new project starts by property developers, cautious capital expenditure by customers, and intensified market competition, leading to a decrease in PC component delivery volume and a suspension of new orders for decoration and landscaping services due to business adjustments. (2) An expected increase in credit losses mainly related to trade receivables and other receivables, with an expected total credit loss amount between approximately HKD 400 million to HKD 500 million, higher than the previous year, due to increased customer pressure, payment delays, and rising default risks. (3) Impairment losses on fixed assets, construction in progress, contract assets, financial assets, and other projects, with a total amount between approximately HKD 400 million to HKD 500 million, mainly including impairment of fixed assets (properties, factories, and equipment), construction in progress, contract assets, and financial assets, primarily due to a decrease in residential PC demand leading to lower utilization of production facilities, project delays or suspensions due to a weak market, weakened customer payment ability, and a decrease in recoverable amounts for investment instruments.