WENYE GROUP (01802) announced that the group expects its revenue to decrease from approximately RMB 13.5 million for the six months ended June 30, 2024, to no less than approximately RMB 4 million for the first half of 2025. Compared to a loss of approximately RMB 21.7 million in the first half of 2024, the company expects to turn profitable in the first half of 2025.

The company anticipates a net profit of no less than approximately RMB 800 million for the first half of 2025. Additionally, the company's net debt is expected to decrease significantly from approximately RMB 930 million as of December 31, 2024, to no more than approximately RMB 70 million in the first half of 2025.

According to the announcement, the changes are attributed to: (i) Revenue decrease - (a) macroeconomic conditions and slow recovery in China's real estate market, with the group's decoration business closely tied to the real estate sector; and (b) debt and litigation issues of Shenzhen Wenye Decoration Design Engineering Co., Ltd. (Wenye Decoration) and frozen bank accounts making it difficult for the group to secure new contracts and operate its construction decoration and design business. (ii) Turnaround to profitability - as announced by the company on June 12, 2025, the disposal of the company holding interests in Wenye Decoration as part of the liquidation of former subsidiary Sosang (HK) Holdings Limited resulted in a significant increase in the group's other income. (iii) Significant reduction in net debt - the disposal of Wenye Decoration led to the removal of its liabilities from the group. Wenye Decoration carried most of the group's liabilities, with the company providing guarantees for approximately RMB 41.68 million in loans for Wenye Decoration.