KWG Living Group (3913) investor relations material

Executive summary

• Revenue for the six months ended 30 June 2025 was RMB1,658.1 million, down 13.8% year-over-year, with a net loss of RMB276.6 million, reversing from a profit in the prior year.

• Gross profit declined 25.7% to RMB418.8 million, and gross margin fell to 25.3% from 29.3% year-over-year.

• The downturn was driven by macroeconomic headwinds, industry adjustments, strategic contraction in certain business lines, and significant impairment provisions on trade receivables, goodwill, and property, plant and equipment.

• The company focused on deepening its presence in core regions, enhancing service quality, and improving operational efficiency through cost control and digital upgrades.

• Business independence improved, with revenue from independent third parties rising to 91.5% from 85.2% year-over-year.

Financial highlights

• Revenue decreased to RMB1,658.1 million from RMB1,923.4 million year-over-year.

• Net loss was RMB276.6 million, compared to a net profit of RMB69.9 million in the prior year; basic and diluted loss per share: RMB13.23 cents (compared to earnings of RMB2.85 cents per share in prior year).

• Administrative expenses decreased by 13.5% to RMB206.7 million; cost of sales fell 8.8% to RMB1,239.3 million.

• Other expenses rose 68% year-over-year to RMB370.3 million, mainly due to impairment losses on trade receivables (RMB237.2 million), goodwill (RMB84.5 million), and property, plant and equipment (RMB28.8 million).

• Cash and cash equivalents stood at RMB1,140.9 million as of 30 June 2025.

Outlook and guidance

• The company expects continued global economic uncertainty but anticipates steady domestic recovery in the second half of 2025.

• Strategic focus remains on core regions, quality service, commercial asset operations, and talent development.

• Emphasis on prudent risk management, cost control, and sustainable development amid ongoing industry challenges.

• No interim dividend declared for the period.