INVESTECH HLDGS (01087) issued a profit warning, expecting a decrease in annual net loss to approximately 47 million to 52 million yuan.

INVESTECH HLDGS (01087) announced that it is expected to reduce its net loss to approximately RMB 47 to 52 million in the fiscal year 2025, compared to around RMB 63.5 million in the fiscal year ending on December 31, 2024. The announcement stated that the expected reduction in loss is mainly due to the following factors: the gross profit for the fiscal year 2025 is expected to increase by approximately RMB 57.4 million compared to the fiscal year 2024, as a result of improved sales performance in the group's information technology infrastructure system integration business; the loss in fair value of investment properties for the fiscal year 2025 is expected to decrease by approximately RMB 16.1 million compared to the fiscal year 2024; the fair value gain on equity investments recognized in profit and loss for the fiscal year 2025, as opposed to the fair value loss of approximately RMB 2.9 million in the fiscal year 2024; the net amount of tax credits for the fiscal year 2025 is expected to increase by approximately RMB 3 million compared to the fiscal year 2024; and the impairment of goodwill related to the cash-generating unit (Cash Generating Unit) of the group's network system integration for the fiscal year 2025 is expected to increase by approximately RMB 8.5 million compared to the fiscal year 2024. The group anticipates that the slowing growth in gross profit and increased operational costs in the intelligent office software solutions business may adversely affect the group's operating performance and competitive position, leading to a downward revision of the expected future cash flows and recoverable amount of the Cash Generating Unit. The fair value losses on investment properties and impairment of goodwill are non-cash items and do not have an immediate impact on the group's cash flow and operations.