CHINA NEW HLDGS issues a profit warning, expecting an annual loss of approximately HKD 21 million to HKD 23 million
CHINA NEW HLDGS issued a profit warning, expecting an annual loss of between HKD 21 million and HKD 23 million for the year ending March 31, 2025, a significant increase from the loss of HKD 9.8 million in the same period of 2024. The main reasons for the increase in losses include a decline in profit margins for new bidding projects, a decrease in leasing equipment rates, intensified price competition, and increased direct costs and administrative expenses due to the complexity of design work
According to the Zhitong Finance APP, CHINA NEW HLDGS (08125) announced that it expects a loss of approximately HKD 21 million to HKD 23 million for the year ending March 31, 2025, compared to a loss of approximately HKD 9.8 million for the year ending March 31, 2024.
The board believes that the increase in losses is mainly due to, but not limited to, the following reasons:
For the year ending March 31, 2025, the profit margins of new bidding projects related to design, decoration, and engineering services have decreased; and the rental rate of construction equipment has declined, along with ongoing price competition throughout the year posing challenges to operations, thereby adversely affecting gross profit margins.
For the year ending March 31, 2025, the increase in direct costs is due to the high costs of building materials, installation fees, and design and labor costs arising from the complexity of design work and frequent changes in design and construction plans.
In addition, the increase in administrative expenses for the year ending March 31, 2025, is mainly due to the increased employee costs associated with the preliminary startup funding for upcoming new projects and the hiring of additional staff
