Qifu Lifestyle Services (HK03686, stock price of HK$0.495, market cap of HK$503 million), which previously reaped huge profits from “gold and silver” investments, has suffered a setback in its precious metal investments this time.
On August 17, Qifu Lifestyle Services, a Hong Kong-listed property enterprise, released an updated profit warning announcement, stating that the company’s performance has reversed sharply from profit to loss. According to the announcement, the company expects a loss attributable to owners of the company of RMB 2.4 million to RMB 4.4 million in the first half of 2026, compared with a profit of RMB 75.1 million recorded in the same period of 2025.
After sorting out the announcements of Qifu Lifestyle Services, a reporter from National Business Daily found that the company liquidated all unallocated silver bars at a high level in January 2026, with a total transaction consideration of RMB 388 million. Qifu Lifestyle Services sold a total of about 21.15 tons of silver bars within 5 days. Calculated based on the book value of unallocated silver bars at the end of 2024, this sale can generate a reference income of about RMB 247 million.
From February to June 2026, Qifu Lifestyle Services continued to purchase allocated silver bars and gold bars. With the sharp correction of gold and silver market prices in the middle of the year, according to its updated announcement on August 17, precious metals in the first half of the year generated a total fair value loss of RMB 83.4 million, including floating loss of RMB 59.9 million on allocated silver bars, floating loss of RMB 10.6 million on unallocated gold bars, and floating loss of RMB 12.9 million on allocated gold bars, and this part of the loss is an unrealized floating loss.
Gold and silver investment leads to loss from profit in the first half of the year
The precious metal investment layout of Qifu Lifestyle Services started in 2020. Since then, with the weak growth of its main business, precious metal investment has gradually become an important cross-border revenue-generating channel for the company.
In recent years, the overall business scale of the company has gradually weakened. The company’s revenue was RMB 421 million in 2020, and it has dropped to RMB 320 million in 2025; during the same period, gross profit also fell back from RMB 184 million to RMB 166 million.
Against the background of pressure on the growth of its main business, increasing investment in the silver market has become an important choice for the company. From February 25 to 28, 2020, Qifu Lifestyle Services intensively purchased silver bars in 4 days; in the whole year of 2020, it spent a total of RMB 102.5 million to purchase 800,000 ounces of silver bars.
In 2022, the silver price rose, and the company reduced part of its silver positions in three batches, gaining a net income of about RMB 15 million. Relying on this investment income, the company still achieved positive net profit growth against the backdrop of declining revenue and gross profit in that year, making silver investment a breakthrough for short-term performance.
After reaping the benefits, Qifu Lifestyle Services continued to increase its silver investment. From July to August 2024, it invested another RMB 77.9 million to layout silver bars. In 2025, the company’s silver bar positions generated large fair value floating profits, driving the net profit of that year to surge 191.8% year-on-year, hitting a new high in performance in recent years.
In early January 2026, the company liquidated all its silver positions at a high level, which can generate a reference income of about RMB 247 million calculated based on the book value at the end of 2024. This reference calculated income is almost equivalent to the sum of the company’s main business operating profits in the past three years.
With the recent adjustment of the gold and silver market, Qifu Lifestyle Services has also faced investment losses.
The reporter’s sorting found that only more than ten days after completing the full liquidation of all silver bars in January 2026, Qifu Lifestyle Services re-entered the market on a large scale, and bought at the historical high of gold and silver prices. From February to June, it invested a total of about HK$355 million (equivalent to about RMB 320 million) to layout gold and silver assets.
Affected by the continuous decline in gold and silver market prices, the initial version of the profit warning on July 16 showed that the company’s positions generated a total fair value loss of about RMB 82.1 million. The updated announcement on August 17 raised the floating loss to RMB 83.4 million. Assuming that this floating loss is used to offset the RMB 44.4 million income from the previously sold gold and silver, the net loss on precious metal investment still reaches RMB 39 million, which directly leads to the company’s performance turning from profit to loss in the first half of 2026. This part of the floating loss is an unrealized loss.
According to the 2025 annual report data, the company’s cash and cash equivalents are about RMB 205 million, and the total amount including time deposits is about RMB 285 million.
Public information shows that the actual controller, chairman and general manager of the company is Meng Lihong, who is the wife of Peng Linji, the founder of Clifford Group and a real estate tycoon. In the early 1990s, Clifford Group led by Peng Linji pioneered the large-scale real estate development model in China, turning a deserted swamp wasteland into “No.1 Estate in China”, which is the current Clifford Estates.
Activating idle funds is a common phenomenon in the industry
In the view of some insiders, the reason why some small and medium-sized enterprises choose to participate in various wealth management and investment activities fundamentally reflects the collective confusion of enterprises after the growth of their main business slows down, and they have to “generate income” through other channels.
Taking Qifu Lifestyle Services as an example, it is a typical small and micro property enterprise. According to the financial report, by the end of 2025, the company managed 16 residential areas and 6 pure commercial properties, with a total contracted management area of about 10.189 million square meters. Its scale is far less than that of leading property enterprises, and its property management revenue is limited, which is difficult to support the overall profit of the company alone.
In terms of revenue proportion, by the end of 2025, the retail service of Qifu Lifestyle Services ranked first with 39.01%, and the property management service accounted for only 35.74%; the revenue of its main property management business is not enough to support the company’s profit. Among the total net profit of about RMB 285 million for the whole year, the fair value income brought by silver bar investment alone contributed RMB 203 million, accounting for more than 70% of the net profit. The operation level has been highly dependent on investment income to make up for the shortcomings of the main business sector.
In fact, it is a common phenomenon in the industry for property enterprises to activate idle funds.
Song Ziqian, senior researcher at China Property Management Think Tank, believes that after the adjustment of the real estate industry, the speed of external expansion of property enterprises has slowed down. The phenomenon of property companies making investments and wealth management reflects the growth bottleneck faced by the industry. As the real estate industry enters a period of adjustment, the speed of area expansion of property companies has slowed down, and a large number of cash assets need to find a way out.
“According to the statistics of China Property Management Think Tank, the total cash reserve of Hong Kong and A-share listed property enterprises has exceeded 100 billion yuan. Where such a huge amount of capital will go has become an issue that cannot be ignored in the industry.” Song Ziqian analyzed.
In response to the controversy over cross-border investment by small and medium-sized property enterprises, Bai Wenxi, vice chairman of China Enterprise Capital Alliance, gave a dialectical interpretation. Bai Wenxi believes that the investment of small and medium-sized property enterprises is not simply “not doing their proper business”. “The charging model of property enterprises is ‘charging first and paying later’, and there are idle funds on the books all year round. Small and medium-sized property enterprises do not have enough projects to expand, and idle funds will continue to dilute ROE (Return on Equity). Activating working capital is a restoration of the time value of capital.”
He said directly that there are obvious flaws in the operation of Qifu Lifestyle Services, the core of which is a serious mismatch of capital cycles. The deposited funds of property management are “short-term liabilities” that can be used at any time, while precious metals are long-cycle high-volatility assets, which are very likely to impact the cash flow of the main business, and easily form a situation where “profitable operations are a stroke of genius, while loss-making operations are misappropriation of funds”.
“If some small and medium-sized property enterprises are also facing the situation of ‘having money but no projects’, they can completely move part of their idle funds from 2% bank wealth management to fields with higher returns, but the premise is to write the three matters of ‘what to invest, how much to invest, and who to do risk control’ into the articles of association, and build a firewall completely isolated from the main business.” Bai Wenxi said.
(Disclaimer: The content and data of the article are for reference only and do not constitute investment advice. Investors operate accordingly at their own risk.)
This article is from the WeChat Official Account “National Business Daily”, Author: Chen Ronghao, Editors: Duan Lian, Yang Jun, Du Hengfeng, Proofreader: Liang Luyue, Published with authorization from 36Kr.