On March 13, the Country Garden Holdings issued a profit warning. According to the announcement, the board of directors of the Company (the "Board") wishes to inform the shareholders and potential investors of the Company that, based on the information currently available to the management, including the preliminary assessment of the unaudited management accounts of the Group for the year ended 31 December 2022 and other information currently available, the Board of Directors of the Company (the "Board") has made a preliminary assessment of the Compared with the core net profit of approximately RMB26.9 billion and the profit attributable to shareholders of approximately RMB26.8 billion for the year ended 31 December 2021, The Group expects that it may record a decrease in fair value excluding changes in fair value, The core net profit attributable to shareholders of the Company after the effect of net exchange gains and losses is in the range of approximately RMB1 billion to RMB3 billion and the loss attributable to shareholders is in the range of approximately RMB5.5 billion to RMB7.5 billion.
This was mainly due to: (I) the decrease in gross profit margin of the real estate business as a result of the transfer of certain projects with low gross profit margin during the period; (II) the increase in the provision for impairment of property projects; and (III) the expected net foreign exchange loss as a result of foreign exchange fluctuations.
The Board is of the view that most of the factors affecting the above earnings are non-cash in nature. Despite the severe challenges faced by the industry in 2022, the Company still made every effort to ensure delivery, and together with joint ventures and other projects, it has delivered nearly 700,000 suites, ranking first in the industry. In the face of the weak sales market, the Group focused on the core management objective of cash availability, maintained a sound financial position and operating conditions, maintained a low net debt ratio for a long time, and maintained a good credit record. At the same time, the Company remained at the forefront of the industry in terms of sales, smooth financing channels and issuance of bonds with the support of regulatory authorities for many times. It is one of the few high-quality private real estate enterprises in the industry that can complete the issuance of various types of financing. In addition, the Company has entered into strategic cooperation agreements with dozens of banks and obtained more than RMB300 billion of intentional comprehensive credit support. Looking ahead, the real estate industry is still one of the pillar industries of China's economy. The Company will seize the opportunity of market recovery, implement the new development model, continue to follow the path of high-quality development, and combine with the technology construction system to continuously enhance the comprehensive competitiveness of the whole cycle. The Board has full confidence in the development of the Group.
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