China New City Group Limited (CHINA NEWCITY) reported a sharp reversal into the red for the year ended 31 December 2025, as the completion of major projects sent property-development revenue plunging and profitability deteriorating across key metrics.
Revenue and profit: • Group revenue fell 82.0% year on year to RMB 739.70 million, with commercial-property development income sliding 90.8% to RMB 339.44 million after most revenue from the Hangzhou IOC A2.1 project was booked in 2024 and no comparable new projects were delivered in 2025. • Gross profit contracted 95.6% to RMB 91.07 million, slicing the margin to 12.3% from 50.2% a year earlier. • The company swung to a net loss of RMB 290.99 million, versus a RMB 485.77 million profit in 2024; loss attributable to shareholders was RMB 276.19 million (FY2024 profit: RMB 503.91 million). Basic and diluted earnings per share turned to a loss of RMB 0.143 from earnings of RMB 0.251.
Segment performance: • Commercial property development remained the largest contributor with 45.9% of revenue but contracted sharply. • Hotel operations generated RMB 198.01 million (26.8% of revenue), down 11.8%, with occupancy slipping to approximately 62%. • Property rentals rose 23.3% to RMB 150.81 million (20.4% of revenue) on higher occupancy and new community-commercial projects; average portfolio occupancy improved to 83%. • Other services contributed RMB 51.45 million.
Costs and expenses: • Selling and distribution costs fell 20.4% to RMB 117.51 million, reflecting lower sales activity. • Administrative expenses declined 6.7% to RMB 112.37 million as cost controls took effect. • Net impairment losses on financial assets surged to RMB 103.46 million (FY2024: RMB 10.39 million). • Finance costs jumped 78.2% to RMB 210.61 million due to increased borrowings and reduced capitalised interest. • Other expenses nearly halved to RMB 43.81 million, though they still included RMB 32.09 million of property-and-equipment impairments.
Balance sheet and liquidity: • Total assets edged down 3.2% to RMB 12.96 billion; net assets fell 14.3% to RMB 4.58 billion, lowering net asset value per share to RMB 2.48 (2024: RMB 2.66). • Cash and restricted cash declined to RMB 286.58 million from RMB 886.09 million. • Interest-bearing debt increased to RMB 5.06 billion (2024: RMB 3.40 billion), lifting the gearing ratio to 58% (2024: 46%). • Current ratio improved to 1.56 from 1.12, aided by a reduction in short-term borrowings.
Cash flow and capital commitments: • Capital expenditure was RMB 72.05 million, primarily for property and equipment. • Committed but unprovided property development expenditure stood at RMB 167.42 million.
Other highlights: • Other income and gains rose to RMB 206.66 million, boosted by a RMB 153.40 million gain from remeasuring a 42.5% stake in Zhejiang Xinnongdu Holdings Group Limited after settlement of a long-running dispute. • The company repurchased and cancelled 166.74 million shares related to the XND transaction. • No final dividend is proposed for FY2025.
Management commentary: The board attributed the earnings reversal to the absence of large-scale project deliveries in 2025 following the previous year’s peak from IOC A2.1. Looking ahead, management sees continued challenges in China’s real-estate sector but intends to maintain prudent operations, focus on urban-renewal projects, and enhance cost and risk controls to preserve financial stability.
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