ZHENRO PPT (06158) issues profit warning, expecting the shareholder's net loss to increase by about 17 to 18 billion yuan in 2025 compared to the previous year.

ZHENRO PPT (06158) issued an announcement, expecting the group to incur a loss attributable to the owners of the parent company of approximately RMB 17 billion to RMB 18 billion in the fiscal year 2025 (ending on December 31, 2025) (the loss attributable to the owners of the parent company in the fiscal year 2024 (ending on December 31, 2024) was approximately RMB 6.83 billion), as well as a core loss (i.e. net loss after excluding impairment losses, fair value changes, and foreign exchange gains/losses) of approximately RMB 5 billion to RMB 6 billion (core loss in 2024 was approximately RMB 3.178 billion). The loss attributable to the owners of the parent company mainly stems from the following reasons: in fiscal year 2025, (i) the overall decline in demand in the real estate industry in the People's Republic of China resulted in a decrease in project selling prices and gross profit, as well as impairment provisions for unsold properties under development, sold completed properties, and other assets, and financial assets; (ii) an increase in financing expenses not capitalized; and (iii) a decrease in fair value of investment properties. The expected loss is expected to increase mainly due to lower gross profit and increased impairment provisions compared to the fiscal year 2024.