Hong Kong-listed China Star Entertainment Limited (China Star Ent, 00326) posted a sharp downturn for the financial year ended 31 December 2025, as weaker property sales and a sizeable impairment on Macau projects eroded profitability.

Revenue and Profitability • Consolidated revenue fell 44.4% year on year to HK$404.92 million. • Gross profit slipped 9.9% to HK$114.31 million, lifting the gross margin to 28.2% (2024: 17.4%). • Loss attributable to owners widened 26.1% to HK$443.76 million, while total net loss surged 52.2% to HK$533.60 million. • Loss per share increased to HK18.27 cents from HK14.48 cents. • No final dividend was declared.

Key Drivers • Property Development & Investment: Segment revenue dropped 66.8% to HK$224.49 million amid softer sales at the “Tiffany House” residential project in Macau. The segment booked a HK$418.54 million loss, heavily impacted by a HK$307.77 million write-down on Macau properties (including HK$280.21 million on the “Lake Yoho” C7 site). • Multi-Media & Entertainment: Revenue jumped to HK$179.81 million (2024: HK$50.79 million) on higher livestreaming e-commerce activity, trimming the segment loss to HK$18.25 million. • Film-Related Operations: Revenue was marginal at HK$0.62 million, contributing a segment loss of HK$2.48 million after a HK$3.22 million impairment on film rights.

Cost and Expense Highlights • Administrative expenses rose 18.5% to HK$174.34 million, reflecting higher costs in the e-commerce and catering units. • Marketing, selling and distribution expenses fell 35.6% to HK$65.10 million, consistent with lower property sales activity. • Finance costs eased 25.7% to HK$100.15 million, mainly due to reduced interest on the Tiffany House term loan.

Balance Sheet and Liquidity • Total assets stood at HK$4.43 billion; equity attributable to shareholders was HK$1.61 billion. • Cash, time deposits and restricted cash totalled HK$186.19 million. • Total borrowings reached HK$1.98 billion, lifting the gearing ratio to 123% (2024: 79%). • Net current assets contracted to HK$1.02 billion from HK$2.86 billion a year earlier. • The HK$861.36 million term loan for Tiffany House becomes due within 12 months; management plans to negotiate a restructuring.

Geographical Mix Macau remained the core market, contributing 55.4% of group revenue, followed by mainland China at 44.6%. Hong Kong operations were negligible.

Outlook Management expects Macau residential demand to stabilise on policy easing and anticipates cash inflow once occupation permits for the “Lake Yoho” project are obtained in mid-2026. The group intends to leverage AI tools to enhance its e-commerce efficiency and will focus on launching health-oriented private-label products and short-form drama content.