Scholar Edu (01769) has announced that the Board expects the Group to record a net loss attributable to owners of the Company of approximately RMB 70 million to RMB 80 million for the year 2025 (2024: net profit attributable to owners of the Company of RMB 145.6 million).

After excluding share-based compensation expenses, the Group is expected to record an adjusted net loss attributable to owners of the Company of RMB 40 million to RMB 50 million (2024: adjusted net profit attributable to owners of the Company of RMB 175.7 million).

The anticipated loss is primarily attributed to the Group's strategic enhancement of business development and the exploration of new ventures, which includes expanding its business coverage and opening new literacy learning centers in more cities.

As these newly opened literacy learning centers were still in their initial operational phase during 2025, the revenue generated from them remained limited.

However, direct operating costs—such as employee expenses and benefits, amortization, depreciation, utilities, and property management fees—remained at a relatively high level compared to the revenue generated, negatively impacting the Group's overall profitability.

Furthermore, due to defaults by counterparties, certain of the Group's financial asset investments, amounting to approximately RMB 30 million, could not be redeemed upon maturity, resulting in a fair value loss on these assets.