ZG GROUP-W (06676) announced that the group expects to achieve net profit attributable to owners of the company of approximately RMB 140 million to RMB 180 million for the six months ended June 30, 2025, compared to a net loss attributable to owners of the company of approximately RMB 76 million for the six months ended June 30, 2024.

Additionally, the group expects to record adjusted net loss attributable to owners of the company of approximately RMB 87 million to RMB 127 million for the six months ended June 30, 2025, compared to adjusted net loss attributable to owners of the company (non-IFRS measure) of approximately RMB 64 million for the six months ended June 30, 2024.

The group defines adjusted net loss (non-IFRS measure) as profit/(loss) for the period, adjusted to exclude (i) fair value changes of convertible preferred shares and warrants; (ii) share-based payments; (iii) professional fees and expenses related to SPAC merger transactions; and (iv) SPAC merger transaction expenses arising from capital restructuring.

The turnaround from loss to profit is primarily attributed to fair value changes from the valuation of preferred shares and financial liabilities measured at fair value through profit or loss, resulting in non-cash gains of approximately RMB 769 million for the current period (compared to non-cash losses of approximately RMB 4 million in the same period of 2024). This gain mainly stems from the conversion of convertible preferred shares to ordinary shares through SPAC merger transactions following the company's listing, which has been confirmed by the company's auditors.

Meanwhile, the company's overseas strategy continued to gain momentum in the first half of the year, with overseas trading business gross profit growing significantly. On the other hand, the expansion of adjusted net loss was mainly due to the discontinuation of Fat Cat IOUs and Fat Cat Easy Purchase under transaction support settlement services (fintech solutions). Following the company's listing, the company has gradually resumed fintech solutions through equity participation.