INVENTECH HLDGS expects annual net loss to decrease to RMB 47 million to RMB 52 million

INVESTECH HLDGS (01087.HK) announced that for the fiscal year ending 2025, the group expects to record a net loss reduced to approximately RMB 47 million to RMB 52 million, compared to approximately RMB 63.5 million in the same period last year.

The group stated that the above situation is mainly due to the combined effects of the following: (i) the gross profit for the fiscal year 2025 is expected to increase compared to approximately RMB 57.4 million in fiscal year 2024, due to improved sales performance in the group’s information technology infrastructure system integration business; (ii) the fair value loss on investment properties for fiscal year 2025 is expected to decrease compared to approximately RMB 16.1 million in fiscal year 2024; (iii) the group expects to record fair value gains on equity investments measured at fair value through profit or loss for fiscal year 2025, whereas a fair value loss of approximately RMB 2.9 million was recorded in fiscal year 2024.

In addition, (iv) the net income tax credit for fiscal year 2025 is expected to increase compared to approximately RMB 3 million in fiscal year 2024; and (v) the goodwill impairment related to the group’s network system integration cash-generating units for fiscal year 2025 is expected to increase compared to approximately RMB 8.5 million in fiscal year 2024, mainly due to considerations of geopolitical risks and market fluctuations (including intensified competition, changing customer preferences, higher functional requirements, rapid technological changes, and industry innovation), which may lead to a slowdown in the gross profit growth of the group’s smart office software solutions business and increased operating costs, thereby potentially adversely affecting the group’s operational performance and competitive position, and resulting in a downward adjustment of the expected future cash flows and recoverable amounts of the cash-generating units.

The group also indicated that its fair value loss on investment properties and goodwill impairment are non-cash items and do not have an immediate impact on the group’s cash flow and operations