MEIDONG AUTO (01268) announced that it expects to record a loss attributable to equity shareholders for the interim period of 2025. The board of directors believes that the loss attributable to equity shareholders for the interim period of 2025 is primarily due to macroeconomic factors in the first half of 2025, continued weakening of domestic consumption, imbalanced supply and demand in the passenger vehicle market, and escalating price wars, particularly with intensified impact on luxury vehicles.

Based on currently available information, especially considering the impact of increased consumption tax on ultra-luxury vehicles affecting future performance of ultra-luxury cars and the expected decline in mortgage commission rates leading to reduced future mortgage application service income, the company conducted impairment assessments with the assistance of external valuers. Non-cash goodwill and dealer rights impairments totaling at least RMB 800 million were recognized for certain underperforming cash-generating units in the first half of 2025, compared to combined non-cash goodwill and dealer rights impairments of approximately RMB 150 million in the interim period of 2024.

Primarily affected by the aforementioned factors, the expected loss attributable to equity shareholders for the interim period of 2025 is at least RMB 800 million, compared to a loss attributable to equity shareholders of approximately RMB 30 million in the interim period of 2024.

The board of directors believes that the group's overall financial position remains stable and sound, with healthy operating cash flows. The group will continue to maintain a prudent and stable financial strategy.