NETJOY (HKG: 02131) has issued a profit warning. Based on a preliminary assessment of the group's unaudited consolidated management accounts for the six-month period ending June 30, 2025, and the information currently available to the board, the company expects to report a net loss in the range of approximately RMB 23 million to RMB 28 million for the period. This compares to a net profit of about RMB 23.85 million for the corresponding period ended June 30, 2024.

Reasons for the Loss

According to currently available information, the board attributes the shift from profit to loss primarily to intensified competition and changing market demands within China's digital marketing sector. Advertisers have become more cautious with their budgets, and the cost of traffic on major media platforms has remained high. These factors have led to a decline in the gross profit margin of the group's core intelligent marketing solutions business, resulting in a lower gross profit compared to the previous corresponding period.

Additionally, the group's continued investment in research and development to enhance competitiveness and support long-term growth has also impacted the profit performance for the reporting period.