CAPITAL ENV (03989) has issued an announcement stating that on March 12, 2026, its board of directors approved a change in accounting estimates related to the default status within the expected credit loss model for trade receivables. The adjustment involves revising the provision for impairment from "generally, a full impairment is recognized for trade receivables (excluding those due from the Ministry of Finance of the People's Republic of China) that are aged over three years and not subject to enforcement actions" to "applying a 100% loss rate to trade receivables (excluding amounts due from the Ministry of Finance of the People's Republic of China) aged over five years." This change will be effective from December 31, 2025.

The modification in accounting estimates is applied prospectively and does not impact the group's previously reported earnings, cash flows, financial position, or operating results for any prior periods. Based on the company's preliminary calculations using currently available information, this change is expected to reduce the impairment loss on trade receivables by approximately RMB 391 million for the year ending December 31, 2025. Consequently, post-tax profit is projected to increase by approximately RMB 293 million, with total assets and net assets also rising by about RMB 293 million.

As the audited financial statements for the year ending December 31, 2025, have not yet been finalized, specific details will be disclosed in the full-year results announcement expected to be published on or around March 18, 2026. The company's auditor, BDO Limited Hong Kong, will audit the group's consolidated financial statements for the 2025 fiscal year, which incorporate this change in accounting estimates.