KANGHUA HEALTH (03689) announced that the group expects to achieve a profit of RMB 32 million to RMB 33 million for the six months ended June 30, 2025 (with management still finalizing the exact amount), compared to a loss of approximately RMB 24.7 million for the six months ended June 30, 2024.

This improvement is primarily attributable to the group's disposal of a 55% equity interest in Kangxin Hospital. Due to the disposal, which was completed in February 2025, the group expects to record a disposal gain of approximately RMB 19.5 million in the 2025 interim period. Kangxin Hospital had been recording losses continuously over the past years. Following the disposal, Kangxin Hospital's financial results have been deconsolidated from the group's financial results.

The group has accounted for its remaining 45% equity interest in Kangxin Hospital as an investment in an associate using the equity method under "interests in associates," and expects to record its share of Kangxin Hospital's loss of approximately RMB 18.4 million in the 2025 interim period. The remaining 55% of Kangxin Hospital's losses will not be consolidated into the group's financial results for the 2025 interim period.

Therefore, compared to the full consolidation of Kangxin Hospital's losses prior to the disposal, the disposal has had a net positive impact on the group's financial performance.