CHINA DONGXIANG (Group) Co., Ltd. has announced a profit warning for the fiscal year ending March 31, 2026.

The company anticipates it will report a net loss attributable to equity holders not exceeding RMB 180 million for the 2025/2026 fiscal year.

This represents a significant shift from the previous fiscal year, which concluded on March 31, 2025, where the company recorded a net profit attributable to equity holders of approximately RMB 207 million.

Key Factors for the Expected Loss

The expected net loss for the current fiscal year, compared to the profit achieved last year, is primarily attributed to several key factors.

Firstly, the volatility in capital markets during the second half of the 2025/2026 fiscal year, particularly the sustained downturn observed in March 2026, led to a decrease in gains from the fair value changes of financial assets.

Secondly, the depreciation of the US dollar against the Chinese Renminbi resulted in foreign exchange losses, as the group holds a substantial portion of its assets in US dollars.

Finally, the company has made an impairment provision for loans extended to current and former management personnel.

It is important to note that this impairment loss is non-cash in nature and does not impact the group's core business operations or its cash flow position.