SUNART RETAIL (06808) has announced that it expects to report a net loss for the six months ending September 30, 2025, estimated to be between RMB 110 million and RMB 140 million (unaudited) under Hong Kong Financial Reporting Standards. This contrasts with a net profit of RMB 186 million and attributable profit of RMB 206 million during the same period last year. The anticipated net loss and the loss attributable to shareholders are primarily due to: (i) Revenue pressure: Increased market competition and weak consumer spending have led to a decline in the average transaction size and average selling price, resulting in a drop in customer spending per transaction; combined with the calendar effect of the Mid-Autumn Festival and National Day being consolidated this year, revenue has fallen by double digits year-on-year; (ii) Profit affected by multiple factors: Initiatives to reduce costs and improve efficiency have significantly offset the profit impact from revenue decline, with one-time factors including reduced income from adaptive adjustments in store layouts, an estimated RMB 150 million (unaudited) loss attributed to organizational optimization in the Central China region, along with a decrease in interest income year-on-year, leading to a reduction in profit. Despite the pressure on net profit, the company’s net cash position remains better than the same period last year. The online B2C business has achieved low single-digit positive growth, reflecting the company’s online operational advantages and resilience. Store adjustments are performing as expected, and there is still room for growth. Currently, the company is steadily advancing its three-year strategic plan by focusing on enhancing product strength, optimizing supply chain efficiency, adjusting existing stores, creating community living centers, expanding new stores, and piloting the forward warehouse model to actively improve operations. The company will continue to deepen strategic execution and fully promote the gradual recovery of operational performance.