Powerlong reports significant loss, faces going concern doubts

Powerlong Real Estate Holdings reported a loss attributable to owners of RMB2,652 million for the six months ended June 30, 2025, compared to a loss of RMB2,623 million in the corresponding period of 2024. Basic loss per share increased to RMB64.1 cents from RMB63.3 cents. The company's revenue decreased by 15.3% to RMB13,251 million, primarily due to a 17.9% reduction in property sales revenue to RMB10,693 million. Contracted sales fell by nearly 50% to RMB3,723 million, with contracted sales area decreasing to 316,718 square meters from 690,941 square meters in 2024.

Gross profit increased slightly by 0.4% to RMB2,025 million, with the gross profit margin rising to 15.3% from 12.9% in 2024, attributed to a higher proportion of high-margin residential and commercial properties. However, fair value losses on investment properties significantly increased to RMB1,721 million from RMB729 million. Income tax expense also rose by 11.6% to RMB1,213 million, mainly due to the write-down of deferred income tax assets.

As of June 30, 2025, total borrowings were RMB56,111 million, with RMB27,598 million due within one year. Total cash, including restricted cash, amounted to RMB7,327 million, resulting in a net gearing ratio of 104.1%. The company disclosed material uncertainties regarding its ability to continue as a going concern, citing defaulted borrowings of RMB22,843 million and a liquidation application filed against a subsidiary.