ROYALE HOME (01198) issued a profit warning, expecting the annual loss to increase to between RMB 580 million and RMB 730 million compared to the previous year.

ROYALE HOME (01198) announced that it is expected to incur a loss of RMB 5.8 billion to RMB 7.3 billion for the current fiscal year ending on December 31, 2025, compared to a loss of approximately RMB 3.48 billion for the fiscal year ended December 31, 2024. The main reasons for the loss in the current fiscal year are attributed to the following factors: (i) the weakening macroeconomic environment and overall market demand affecting the operating profit of furniture products; (ii) a significant decrease in settlement gross profit for home furnishing business due to the transmission of cyclical adjustments in the real estate industry; (iii) general provisions for trade receivables, other receivables, and inventory increasing; (iv) revaluation losses on investment properties; (v) increased losses from equity-accounted investees; and (vi) an increase in financing costs.