Hua Yin Intl H(00989 HK) announced on June 13 that the net loss for the fiscal year ending March 31, 2024 is expected to be no less than RMB 180 million, compared to net profit of about RMB 366 million in the previous fiscal year.

In the previous fiscal year, the group completed and delivered two new property projects: Guan Ze Jiu Xi Hong Fu Phase I and Guan Ze Lan Ting 1A, but there were no new completed and delivered property projects in this fiscal year; therefore, the property sales revenue in this fiscal year is mainly from the remaining residential and commercial property units of completed property projects in previous years. In addition, due to the sluggish real estate market in northeastern China, the group recorded a loss of about RMB 25.5 million from the sale of completed properties held for sale in this fiscal year. Therefore, as of this fiscal year, the group's overall revenue and gross profit are expected to decrease by about RMB 278 million and RMB 48.1 million, respectively, compared to the previous fiscal year.

In addition to the above factors, the group's expected net loss for this fiscal year is mainly due to (i) an increase in fair value loss of derivative instruments (i.e. early redemption clauses) of convertible bonds due to the company's stock price decline in this fiscal year, amounting to about RMB 27.8 million (about RMB 8.2 million in the previous fiscal year); (ii) a provision for impairment of development-in-progress property of Guo Song Xiao Zhen International Resort in Guan Ze (net of deferred taxes) of about RMB 451.2 million in the previous fiscal year, and a impairment loss of about RMB 45.2 million in this fiscal year due to the unfavorable market sentiment in the Chinese real estate market; (iii) a further decrease in the fair value of investment properties by about RMB 61.9 million due to a decline in rental income in the surrounding market of Basha City, Jilin Province, where the group is located; (iv) an increase in the group's financial costs in this fiscal year due to (a) the issuance of convertible bonds with a principal amount of HKD 60 million; (b) a reversal of accrued bank and other borrowing interest of about RMB 43.9 million in the previous fiscal year due to the final determination of the refinancing arrangement with the counterparty, which was not reversed in this fiscal year; and (v) an increase in the group's administrative expenses in this fiscal year due to the setting up of offices for the ginseng and mineral water businesses.