ZHENGTONGAUTO issues profit warning, expects mid-term net loss to increase by approximately 40% year-on-year
ZHENGTONGAUTO issued a profit warning, expecting a mid-term net loss of approximately 40% year-on-year for the period ending June 30, 2025. This loss is primarily influenced by price wars in the automotive market and macroeconomic factors, leading to impairments of goodwill, intangible assets, and fixed assets. Despite the challenges, the group's board of directors believes that with the support of the controlling shareholder, it can still adapt to industry changes and maintain operational development
According to the Zhitong Finance APP, ZHENGTONGAUTO (01728) announced that due to the escalating price war in the automotive market and macroeconomic factors, the group has made provisions for impairment on several currently underperforming 4S store goodwill and/or intangible assets — automotive dealership rights/dealer operating rights, as well as fixed assets such as the properties and renovations of 4S stores planned for transformation. As a result, the group expects to record a net loss for the six months ending June 30, 2025, which will increase by approximately 40% compared to the same period last year. The increase in net loss is mainly due to the decline in new car prices, impairment of goodwill and intangible assets, and impairment of fixed assets.
Based on the long-term strategic support from the group's controlling shareholder, Xiamen Guomao Holdings Group Co., Ltd., and an assessment of the group's unaudited consolidated management accounts for the six months ending June 30, 2025, the board believes that the group can adapt to industry changes and continue to maintain its operational development
