MODERN INNO DT(02322) issued a profit warning, expecting a net loss of approximately HK$220 million to HK$260 million for the year, representing an increase compared to the previous year.

MODERN INNO DT (02322) releases announcement, expecting the Group to incur a net loss ranging from HK$220 million to HK$260 million for the year ending March 31, 2026, compared to a net loss of approximately HK$89 million for the year ending March 31, 2025. The increase in net loss is mainly attributed to the expected increase in credit loss provisions for receivables from customers, most of which are from the Group's trading and lending clients. In the past year, the Chinese economy has not performed as well as expected. The real estate industry has been in a downturn for several years, with property investment plummeting. As most Chinese households' wealth is tied to real estate, the decline in property prices has caused significant negative wealth effects. Domestic demand remains severely depressed, with consumers feeling a shrinking wealth and worrying about the future, leading to substantial cuts in spending. As a result, several of the Group's trading clients are facing financial difficulties and multiple legal claims in China. After careful evaluation by management, the Group has prudently provided for full expected credit loss provisions for these clients. Additionally, the Group's lending business clients in China are also severely impacted by the macroeconomic environment mentioned above, making it difficult to support their cash flow needs through refinancing. Despite these clients providing personal guarantees and owning properties in China, the decline in property prices and sales have weakened their repayment capacity. Therefore, management has also provided for expected credit loss provisions for these clients to more carefully forecast the impact on the Group's financial position.