---
title: "SINOFORTUNE FIN issued a profit warning, expecting a significant increase in annual losses"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/232578211.md"
description: "SINOFORTUNE FIN issued a profit warning, expecting the annual loss for the year ending December 31, 2024, to significantly increase to approximately HKD 99 million, a substantial rise from HKD 15.8 million in the same period of 2023. The reasons for the loss include a significant decline in revenue and impairment of advance payments related to automobile resale. Although the economy is expected to recover in 2024, weak global economic conditions and intense competition in automobile sales have affected consumer purchasing willingness. The company plans to improve automobile sales performance by introducing more new energy vehicles and strengthening marketing efforts"
datetime: "2025-03-20T12:01:05.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/232578211.md)
  - [en](https://longbridge.com/en/news/232578211.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/232578211.md)
---

# SINOFORTUNE FIN issued a profit warning, expecting a significant increase in annual losses

According to the announcement from SINOFORTUNE FIN (08123), the group expects a significant increase in losses for the year ending December 31, 2024 (“reporting period”), amounting to approximately HKD 99 million, compared to a loss of approximately HKD 15.8 million for the same period in 2023.

The losses are primarily due to (1) a substantial decline in revenue; and (2) impairment losses recognized on other paid deposits for acquiring vehicles for resale. The impairment losses are mainly related to a subsidiary of the company that paid a prepayment of approximately RMB 70.2 million to a vehicle supplier under a purchase contract for vehicles intended for resale at the end of 2023. During the review year, the purchase contract's purchase due date had passed, and the vehicle purchase had not been completed. After a prudent review of these purchase contracts, the group's management believes that the prepayment cannot be recovered, leading to an impairment of the prepayment, resulting in a loss of RMB 70.2 million during the reporting period (2023: none) which was deducted in the income statement.

It is anticipated that economic growth will rebound in 2024 following the end of the pandemic, but the growth rate is not as expected. The global economy is affected by ongoing conflicts, geopolitical tensions, and potential global trade restrictions, which weaken consumer purchasing willingness and consumption patterns, thereby impacting vehicle purchase demand. The continued weak economy, coupled with intense competition in the automotive sales industry, has led to customer attrition and the forfeiture of prepayments due to unfulfilled purchase contracts.

To improve the operational performance of the automotive sales division, the company's management team plans to leverage the green transformation and technological advancements in the global automotive industry to introduce more new energy vehicles to customers, promoting the sales of gasoline and new energy vehicles. The group's management will allocate more resources to marketing and sales to enhance the performance of this business division

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