A-Living Services faces significant impairment loss on receivables

A-Living Smart City Services Co., Ltd. reported a net impairment loss on financial assets totaling RMB4,329.3 million for the year ended 31 December 2024. This included RMB3,032 million from trade receivables and RMB1,297 million from other receivables, reflecting a 709.5% increase from the prior year. The impairment was largely due to heightened credit risk from Agile Group and Greenland Holdings, among other property sector entities.

The company's Group 3 Trade Receivables, primarily from Agile Group, faced an 89.94% expected credit loss rate on a gross carrying amount of RMB3,573,411,000. Recovery efforts include shortening credit periods, strict cash collection, and asset offsets. Group 4 Trade Receivables, linked to Greenland Holdings, had a 49.73% expected credit loss rate on RMB407,306,000, with some cash and property transfers recovered.

Under-performing Other Receivables, with a gross amount of RMB905,658,000, had a 57.36% expected credit loss rate, while non-performing receivables of RMB720,000,000 faced a 90.22% rate. Efforts to recover these include agreements for cash repayments and asset transfers, with some write-offs occurring. The company has acknowledged challenges in recovering certain non-performing receivables, opting to waive some interest to maintain business relationships.