HARMONY AUTO (03836) has announced that it expects to report a loss attributable to the company's owners of no more than RMB 635 million for the fiscal year ending December 31, 2025. This compares to a loss attributable to owners of approximately RMB 291 million for the year ended December 31, 2024.

The company attributed the anticipated loss primarily to several factors. As part of its strategy to enhance sales efficiency and profitability by optimizing its existing sales network, the Group recognized a one-time loss of approximately RMB 177 million from the write-off of property, plant, and equipment related to store adjustments. Following a prudent impairment assessment, the Group also recorded non-recurring impairment losses for certain underperforming cash-generating units. This included an impairment provision of about RMB 155.5 million for property, plant, and equipment, and an impairment provision of approximately RMB 32.7 million for right-of-use assets.

Additionally, an expected credit loss of roughly RMB 57.2 million was recognized concerning prepayments and accrued interest from an independent after-sales service company, Henan Harmony Auto Maintenance Service Co., Ltd., which failed to repay its debts in a timely manner. Furthermore, a non-cash fair value loss of approximately RMB 42.1 million arose from convertible bonds issued by a subsidiary of the company. This loss resulted from the re-measurement of financial liabilities at fair value in accordance with relevant accounting standards.

Despite the projected loss, the Group reported that its revenue from automobile sales and other businesses grew by over 30% during the 2025 fiscal year. This growth was mainly driven by the strategic expansion of the Group's international sales network, which broadened its market coverage and increased sales volume.