New Century Group (HKEX: 00234) has issued a profit warning, forecasting an annual attributable loss to shareholders of no more than HK$32 million for the financial year ending March 31, 2026.

This projected loss represents a narrowing compared to the approximately HK$56 million loss reported for the 2025 financial year.

The anticipated reduction in losses is primarily attributed to two key factors.

Firstly, the group experienced a decrease in fair value losses on its investment properties located in Hong Kong.

Secondly, there was a net reduction in impairment losses for receivables, interest, and assets taken in lieu of debt repayment.

However, these positive developments were partially offset by a significant decline in interest income generated from the group's money lending business.

This downturn in lending income is linked to a recovery in the residential property market starting in the second quarter of 2025.

As property prices rebounded, borrowers seized the opportunity to sell their mortgaged properties, leading to an increase in mortgage repayments.

Concurrently, intense competition from traditional banks resulted in a lower volume of new loan applications, causing the overall loan portfolio to contract.