WF International Ltd.

Overview

WF International Limited (“WF”) is a holding company incorporated as an exempted company under the laws of the Cayman Islands. As a holding company with no material operations of its own, it conducts substantially all of its operations through its PRC subsidiaries, primarily Chengdu Shanyou HVAC Engineering Co., Ltd. (“Shanyou HVAC”), which started its business in Chengdu, China in 2009.

We are principally engaged in the provision of supply, installation, fitting-out and/or maintenance services for HVAC systems, floor heating systems and water purification systems. We primarily serve commercial clients. We work with property development companies that offer high-end fully furnished homes, and companies beyond real estate sector, such as manufactories in new energy industry, providing them with comprehensive HVAC related electromechanical solutions. In the second half of fiscal year of 2025, as an authorized service provider for brands including Toshiba and Carrier, we commenced offering HVAC systems services to individual customers, encompassing, providing their repair, replacement and cleaning services. By offering such comprehensive solutions for HVAC systems, floor heating systems and water purification systems, we have positioned ourselves as an integrated supplier of electromechanical products and installation services.

We, through our subsidiaries, primarily engage in three business lines: HVAC system installation and servicing projects, air conditioner sales, and other customized services. We generate revenues primarily from supply, installation, fitting-out and maintenance services for HVAC systems for commercial residential buildings and factory construction ventures.

We were negatively impacted by an overall weakening of the real estate industry as a result of strict financial regulations issued for real estate developers since the second half of 2020 and declined sales of new residential properties in China since the second quarter of 2023. In response, Chinese authorities introduced a series of easing measures in 2024, including lifting purchase restrictions in select cities such as Chengdu, Hangzhou, and Xi’an and lowering the minimum down payment for first-time buyers to 15%, aimed at reducing housing inventory and restoring market confidence. Since the fourth quarter of 2024, new home sales in major cities have shown sustained recovery with resale transactions of residential properties rising rapidly. As a result, we experienced a temporary recovery in revenue growth in our ongoing projects in the real estate sector for the first half of fiscal year 2025, as some of our real estate developer clients accelerated construction schedules to close ongoing projects to capitalize on improving market conditions. However, our performance inevitably was impacted by decelerating new property development investments in China. In addition, continued global market turbulence and declining consumer spending, including home purchases, as well as slowdown in China’s economic growth since 2025, have intensified competition for new construction projects. As a result, our revenue and profitability of construction projects have been adversely affected by weaker demand for new residential construction and increased competition leading to lower contract prices. As a result, our revenue decreased by approximately $6.4 million, or 73.4%, from approximately $8.7 million for the six months ended March 31, 2025 to approximately $2.3 million for the six months ended March 31, 2026.

While the PRC government has adopted and may adjust its measures or adopt new measures in the future seeking to support the healthy development of the real estate market in China, the government policies significantly impacted the residential real estate market in recent years. Currently, our company primarily serves local real estate developers in the Sichuan-Chongqing region of China. Most of these developer customers have focused on in-depth and long-term developments within a single city as compared to aggressive expansions undertaken by the large real estate developers in China, which have struggled with their financial conditions and some of which have filed for bankruptcy, including the one filed by Evergrande Group, one of China’s largest property developers. Slumping demand for new real estate projects has negatively impacted our smaller real estate customers. Declining cash proceeds from home sales have weakened these developers’ financial standing and overall cash liquidity, resulting in project cancellations, delayed bill settlements and payment defaults. Corresponding to such heightened credit risks, we recognized credit losses of approximately $0.6 million for the six months ended March 31, 2026.

In light of the recent developments in the Chinese real estate market and financial conditions of some of our clients, we have taken more rigorous measures to ensure our developer clients have sound and stable financial conditions to avoid any delay or default on payments to us, including incorporating advance payment terms into contracts with our customers, maintaining close communication with our customers, and taking necessary actions to recover outstanding payments.

Despite of the persistent macroeconomic headwinds, China’s residential real estate market is undergoing a transition from basic housing demand dominance to upgrade-driven consumption with affluent investors prioritizing capital preservation and functional enhancement on trophy assets. This accelerates luxury property development investment, benefiting premier HVAC service providers for brands like Toshiba and Carrier, and we are a key supplier in this segment. In order to navigate the market with coexisting challenges and opportunities, we have taken measures to support our sustainable and steady growth, including: (i) stricter client vetting in real estate to prevent default risk; (ii) active collaboration with clients outside of the real estate industry; (iii) on-going exploration into the consumer market, taking advantage of the huge consumer population base and the sales opportunity brought by the renovation of old urban residential areas to improve the quality of living environment, as well as the recovery of the real estate sector, especially luxury property development investment; and (iv) strategically diversifying our investment portfolio to capitalize on growth opportunities, driving future performance and sustainable profit generation.