ZHONGAN GROUP (00672) has issued a profit warning, anticipating a net loss attributable to equity holders of no more than approximately RMB 220 million for the six months ending June 30, 2026. This marks a sharp reversal from a net profit of about RMB 64.6 million recorded in the same period last year.
The expected swing into loss is primarily driven by a significant decline in property delivery. Total gross floor area of properties delivered during the 2026 period is set to drop by over 70% compared to the 2025 period, while the average selling price per square meter has fallen by about 33.0%. As a result, recognized property sales revenue and gross profit for the 2026 period are expected to decrease by approximately 80.0% and 81.5%, respectively, versus the prior year.
However, the average sales cost per square meter has also declined by about 26.8%, limiting the gross profit margin contraction to just 2.6 percentage points. Additionally, the company noted that the 2025 period benefited from a one-time gain of approximately RMB 153 million from the remeasurement of its investment in an associate, which will not recur in the 2026 period.