Chinlink posts FY26 net loss of HK$265.25 million amid sharp property revaluation hit and debt defaults

Bulletin Express
Jun 30

Chinlink International Holdings Limited (“Chinlink”) released its audited results for the financial year ended 31 March 2026 (FY26), reporting a deepened operational downturn across both property investment and financial services segments.

Revenue and profit performance • Total revenue fell 16.40% year-on-year to HK$66.29 million, driven by a 14.70% slide in property-related income to HK$64.83 million and a 54.50% fall in financial services income to HK$1.46 million. • Gross profit contracted 17.47% to HK$45.18 million; gross margin slipped to 68.2% (FY25: 69.1%). • The Group booked a HK$118.73 million fair-value loss on investment properties (FY25: HK$322.03 million) and a HK$43.81 million write-down on properties under development. • Finance costs eased 11.86% to HK$137.06 million after refinancing certain high-interest facilities. • Net loss narrowed to HK$265.25 million from FY25’s HK$345.59 million; basic and diluted loss per share came in at HK22.61 cents (FY25: HK29.54 cents).

Segment highlights • Property investment remained the core revenue contributor (97.7% of total), centred on the Daminggong Construction Materials and Furniture Shopping Centre in Xi’an. Lower occupancy and rent concessions weighed on the top line. • Financial guarantee and other financing services generated HK$1.46 million, reflecting the Group’s cautious stance amid weak credit conditions in Mainland China and Hong Kong.

Balance-sheet and liquidity pressures • Net current liabilities ballooned to HK$1.76 billion (31 Mar 2025: HK$573.23 million) on the back of HK$1.41 billion of bank and other borrowings re-classified as current after covenant breaches and repayment defaults. • Total bank and other borrowings rose to HK$1.81 billion, while 6.5% coupon bonds outstanding amounted to HK$119.11 million. • Cash and pledged deposits stood at HK$14.47 million; cash and bank balances alone were HK$5.78 million. • Gearing ratio (total liabilities/total assets) increased to 0.94 (31 Mar 2025: 0.86). • Auditors issued a “material uncertainty related to going concern” paragraph citing recurring losses, net current liabilities and defaulted borrowings that grant lenders the right to demand immediate repayment.

Debt restructuring and litigation • Management is negotiating with lenders and bondholders to restructure HK$1.39 billion of defaulted borrowings and HK$119.11 million of overdue bonds. • Two bondholders have sued the Company in Hong Kong for HK$18.50 million of principal plus interest. • A PRC bank has revived enforcement proceedings against a Chinlink subsidiary over a RMB117.39 million loan; the pledged assets have been ordered for auction.

Asset base • Total assets dipped to HK$3.06 billion (-2.15% YoY) after property revaluations; investment properties accounted for HK$2.34 billion. • Capital commitments of HK$26.19 million relate mainly to the Phase Two development of the Xi’an commercial complex, now targeted for completion in 4Q 2026.

Auditor and dividend • ZHONGHUI ANDA CPA Limited issued an unmodified opinion with a going-concern emphasis. • The Board recommended no final dividend for FY26 (FY25: nil).

Outlook Management will focus on: 1. Accelerating completion and pre-sales of the Phase Two loft apartments to generate cash; 2. Continuing debt-restructuring talks with financial institutions and bondholders; 3. Exploring asset disposals and potential investor introductions to shore up liquidity; 4. Tightening cost controls and maintaining a conservative approach to new financial services business.

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