ENM HOLDINGS (00128) announced that it expects to achieve a shareholders' profit of approximately HK$21 million for the nine months ending September 30, 2025, a significant turnaround from a shareholders' loss of HK$7.9 million for the year ending December 31, 2024. This improvement in financial performance is primarily attributed to several factors: the fashion retail segment reported a slight profit of approximately HK$2.1 million, mainly due to the sale of a substantial amount of impaired old inventory and a reduction in operating expenses, compared to a loss of HK$3.9 million in the year ending December 31, 2024; the vacation center and club business has ceased operations since mid-June 2024, reporting a loss of HK$6.1 million during the nine months ending September 30, 2024; and the group's realized and unrealized gains from its investment portfolio increased, primarily due to a rise in the fair value of investments held by private equity funds, benefiting from the recovery of the stock markets where some of these funds are invested.

For years, the group has engaged in the retail of luxury fashion and accessories through its subsidiary, Sequel Limited. The operational challenges faced by Sequel have been increasingly severe, exacerbated during the COVID-19 pandemic, while the current market environment in Hong Kong continues to see weak consumer spending on luxury fashion due to low tourist numbers. Consequently, the Board has been closely monitoring the performance and viability of the fashion retail business over the past year. As previously announced on June 6, 2024, after considering various factors including business plans, performance, and lease renewal terms, Sequel decided not to renew the lease for its flagship store in Central.

Despite the implementation of various cost-saving measures and strategies to enhance profitability by the Board and management, the fashion retail business has not demonstrated a sound and sustainable profit outlook. In light of the challenges in the business and market environment, as well as the current rental levels, the Board has resolved not to renew the lease for Sequel's final store located at Ocean Park in Ap Lei Chau, which will expire on November 30, 2025, and to cease the fashion retail operations around that date. Given that the fashion retail business has not shown a capacity to consistently generate profits for the group, the Board believes that it is no longer commercially viable to continue operations in this segment to protect and enhance shareholder value.