ZHONGAN GROUP (00672) issued a profit warning, expecting a mid-year net loss attributable to shareholders of no more than approximately 220 million yuan, reversing from profit to loss year-on-year.

ZHONGAN GROUP (00672) announced that the Group expects to incur a net loss attributable to the owners of the parent company of no more than approximately RMB 220 million for the six months ending June 30, 2026 (the 2026 period), compared to a net profit attributable to the owners of the parent company of approximately RMB 64.6 million for the six months ending June 30, 2025 (the 2025 period). The expected transition from profit to loss in the 2026 period is primarily due to: the total gross floor area of properties delivered in the 2026 period decreasing by more than approximately 70% compared to the 2025 period, and the average selling price per square meter of the relevant properties dropping by approximately 33.0% compared to the 2025 period, resulting in property sales revenue and gross profit for the 2026 period being significantly lower by approximately 80.0% and approximately 81.5% respectively compared to the 2025 period; however, the average selling cost per square meter of the relevant properties also decreased by approximately 26.8% compared to the 2025 period, thus the gross profit margin for the 2026 period only slightly declined by approximately 2.6 percentage points compared to the 2025 period, and there was no occurrence of the one-time remeasurement of the investment in jointly controlled entities amounting to approximately RMB 153 million that was recorded in the 2025 period.