Wise Finance App News, Heng Tai (00197) announced that the expected net loss of the group for the year ended June 30, 2024 is expected to increase by about 56% to 0.196 billion Hong Kong dollars, mainly due to the impairment losses of some assets and investments in the upstream cultivation business of approximately 0.113 billion Hong Kong dollars (fiscal year 2022/23: none)...

The board of directors noted that the group's operating environment remains challenging for the following reasons: Economic growth continues to be hampered by weak market demand following the real estate crisis and the major outbreak of the new coronavirus; domestic product competition remains fierce; adverse weather conditions continue to threaten the group's upstream cultivation business; and the persistently high interest rate environment significantly increases financing costs and hinders new investments.

Given the above unfavorable conditions, the group maintains a conservative stance on the development of upstream cultivation business and has lowered its expectations for the future operating performance of farmland and agrotourism businesses. The group values ​​certain assets and investments in the upstream cultivation business based on the income method to calculate their utility value, to reflect the risks related to adverse factors affecting the upstream cultivation business. Compared to the forecast of the previous fiscal year, management has prepared profit and cash flow forecasts based on a more conservative benchmark, such as lower sales growth estimates, lower gross profit forecasts, and higher discount rates, leading to a decrease in future cash flows, resulting in impairment losses due to the use value being lower than the book value.