ClouDr Group Limited reported aggregate non-recurring impairment charges of RMB639.10 million for the year ended 31 December 2025, driven by credit provisions, asset write-downs linked to a strategic divestment, and policy-induced asset devaluations.
Key elements of the FY2025 impairments:
1. Trade and other receivables – RMB293.20 million • One-off specific provision of RMB264.40 million tied to ClouDr’s out-of-hospital value-added solutions. A pharmaceutical supplier under lawsuits and judicial investigations disrupted collection from the supplier itself and related customers. Collection efforts recovered RMB21.80 million to date (RMB6.80 million in cash, RMB13.40 million in goods, plus RMB5.40 million via litigation); RMB207.00 million remains under legal pursuit. • Additional RMB28.80 million expected-credit-loss provision relates to receivables within the Disposal Group (medical supplies and consumables units slated for sale).
2. Assets held for sale – RMB265.00 million • Reflects the markdown of Disposal Group assets following a reduction in agreed sale consideration to RMB0.10 million after operating losses and value erosion between March and August 2025. The Disposal Group’s net assets fell from RMB314.80 million at end-2024 to near nil by 30 June 2025.
3. Property, plant and equipment – RMB21.00 million • Full write-down of a Lianyungang industrial property once used by Xinwange Medical (part of the Disposal Group). An independent valuation put fair value at RMB14.90 million, below the secured bank loan of RMB26.00 million, rendering the asset’s recoverable amount effectively zero.
4. Goodwill – RMB28.10 million • Polifarma (Nanjing) Pharmaceutical: RMB9.50 million impairment after a revenue slowdown to RMB123.60 million and a swing to a RMB19.50 million net loss. • Hangzhou Zhimin pharmacy chain: RMB18.70 million impairment following the closure of nine stores and a RMB4.10 million net loss amid an industry-wide contraction.
5. Intangible assets (agency/distribution rights) – RMB31.80 million • Full impairment of rights for four drugs—Salbutamol, Olaparib, Dimethicone and Neostigmine—after their inclusion or expected inclusion in national/provincial Volume-Based Procurement (VBP) tenders slashed achievable prices by 84%–98%, eliminating future cash flow prospects.
Management actions and outlook:
• The group has ceased all businesses linked to the troubled supplier and phased out affected value-added pharmaceutical sales by end-2025, limiting further exposure. • Ongoing recovery initiatives include police reports and civil actions; 78.2% of the counterparty-related provision (RMB207.00 million) remains subject to collection efforts. • Post-disposal, ClouDr has retrieved RMB23.20 million from debtors within the Disposal Group, aided by an asset-transfer undertaking from the purchasers’ subsidiary.
The board confirmed that all impairment assessments comply with IFRS 5, IFRS 9 and IAS 36, supported by independent valuations where applicable, and reflect the economic impact of legal disputes, the Disposal Group divestment, and VBP-driven market changes.