BJ ENT URBAN (03718) announced that for the six months ended June 30, 2025, the company expects its first-half shareholder profit to decrease by approximately 70% to 75% compared to the same period in 2024, primarily due to an asset impairment provision of approximately RMB 162 million to be recognized in the first half of 2025.

Xianju Pingfu Environmental Technology Limited (Xianju Project), an indirect wholly-owned subsidiary of the company established in 2018, is primarily engaged in hazardous waste treatment services. The Xianju Project specializes in the incineration of solid hazardous waste. Construction of the facility and equipment was completed in 2022, with trial operations commencing in the fourth quarter of 2022.

However, in early 2024, an unexpected leakage incident was discovered in the environment surrounding the facility, resulting in the immediate suspension of operations. Production has remained suspended to date. Temporary emergency measures have been implemented to prevent further leakage. Based on environmental assessments conducted by third-party experts, a remediation and improvement plan has been developed. Nevertheless, additional costs and time are expected to be required to restore production at the Xianju Project.

Considering the current condition of the Xianju Project and the impact of competitive pressure from other market participants, which has led to oversupply of local disposal capacity, sales prices have declined significantly since the Xianju Project became operational, with low likelihood of recovery. The company has strategically decided to cease operations of the Xianju Project to focus on other sustainable growth opportunities and believes that asset impairment provisions are necessary for the Xianju Project-related assets.

Accordingly, provisions for asset impairment have been made for the first half of 2025. The asset impairment provision for the first half of 2025 amounts to approximately RMB 162 million, including impairment provisions of approximately RMB 95.45 million for property and plant, approximately RMB 65.79 million for equipment, and approximately RMB 294,000 for other intangible assets.

The asset impairment provision is expected to reduce the company's profit attributable to shareholders for the first half of 2025 by approximately RMB 162 million. However, the asset impairment will be a one-time non-cash expense and is not expected to impact the Group's cash flow.