Shanghai Electric announces significant impairment provisions, subsidiary loan guarantee

Shanghai Electric Group announced impairment provisions totaling RMB 94.42 bn for the first half of 2025, significantly reducing pre-tax profit. The provisions include RMB 114.54 bn for credit impairment losses and RMB 40.06 bn for asset impairment losses, partially offset by reversals. This adjustment reflects a thorough impairment test on various assets as of June 30, 2025, aligning with accounting standards.

Separately, the company's board approved a guarantee for Shanghai Electric Group Hong Kong Investment Management Co., Ltd., a wholly-owned subsidiary of Shanghai Electric Group Yuming Mechanical Technology Co., Ltd., for a loan not exceeding €9 bn over three years. This decision was based on the subsidiary's stable operations and the company's effective management, deeming the risk controllable. This guarantee is subject to shareholder approval due to the subsidiary's asset-liability ratio exceeding 70%.

The total external guarantee amount by Shanghai Electric Group and its subsidiaries reached RMB 1,422.85 bn as of the announcement date, representing 26.8% of the company’s net assets as of 2024. The amount for wholly-owned and controlled subsidiaries was RMB 1,283.29 bn, or 24.1% of net assets. The company has no overdue external guarantees.