DIT GROUP (00726) issued a profit warning, expecting a mid-term net loss attributable to shareholders of approximately HK$270 million to HK$300 million, a year-on-year increase.

DIT GROUP (00726) announced that it expects to incur a net loss attributable to equity holders of the company of approximately HK$271 million for the six months ending June 30, 2025, compared to an anticipated net loss of between approximately HK$270 million and HK$300 million for the six months ending June 30, 2026. The anticipated net loss for the six months ending June 30, 2026, is primarily attributable to the following factors: (i) a significant decline in revenue from the prefabricated modular building components (PC) business compared to the same period last year, mainly due to the ongoing adjustment in the domestic construction market, coupled with continued pressure on the market guide price for PC components; at the same time, the Group has optimized factory capacity in response to the current market environment, which has also impacted revenue during the period; (ii) an expected increase in impairment losses on financial assets, mainly related to the provision for expected credit losses on trade and other receivables in response to the current credit environment in the domestic construction industry; and (iii) anticipated losses from the deregistration of certain subsidiaries. The adverse factors mentioned above are partially offset by the following favorable factors: (i) the Group continues to implement cost optimization measures, resulting in a corresponding decrease in operating costs and an improvement in gross profit margin compared to the same period last year; and (ii) the Group actively implemented cost control and business scale optimization measures during the period, leading to a decrease in sales and distribution expenses as well as administrative expenses compared to the same period last year. However, given the expected increase in impairment losses mentioned above, these favorable factors are expected to be insufficient to fully offset the impact of the adverse factors, resulting in an anticipated net loss for the Group during the period that is comparable to or slightly higher than the same period last year.