Shares of POLY PROPERTY (00119) declined following a profit warning, falling nearly 7%. At the time of writing, the stock was down 5.59% to HK$1.52, with a turnover of HK$51.44 million.

The drop comes after the company issued an announcement on July 2, projecting a net loss between RMB 700 million and RMB 800 million for the first half of the year. This contrasts with a net profit of RMB 208 million recorded in the same period last year, marking a shift from profit to loss.

The company attributed the expected loss primarily to a decrease in recognized revenue and a decline in gross profit margin, citing ongoing pressure within the real estate sector.

According to the announcement, the company's contracted sales for the first half of the year amounted to RMB 23.2 billion. Despite the anticipated loss, the company stated its core operational fundamentals remain sound. It highlighted continuous improvements in its net gearing ratio and borrowing costs, maintaining all 'three red lines' metrics in the green zone, and affirmed that it holds ample cash reserves.