Shimao International Holdings yesterday issued a warning on its upcoming interim results, citing the recent acquisition of a loss-making commercial complex project in Suifenhe, the Sino-Russian free-trade zone. The developer, headed by mainland property tycoon Hui Wing-mau, said the lack of new property projects during the period also eroded earnings. Earnings contributions from its Shanghai residential development, Shimao Lakeside Garden, in Pudong, were insignificant as most of the units had been sold and the revenue booked prior to this year. Its luxury townhouse project at 21 Severn Road on the Peak has yet to be released for sale. Shimao shares plunged 6.41 per cent on the news yesterday, touching an intraday low of 72 cents in the morning session before narrowing its losses in late trade. The counter has lost 39.17 per cent of its value so far this year. In a statement filed to the stock exchange, Shimao said its interim results would be 'materially and adversely affected' by a goodwill impairment arising from last month's $496.22 million acquisition of Mr Hui's Suifenhe Shimao Development Project in Suifenhe. Under new accounting standards effective this year, any goodwill arising from an acquisition will be tested for impairment and charged off against the profit and loss account. 'The board is not in a position to quantify precisely the relevant financial effect at this stage,' Shimao said, adding that it would release its first-half results by mid-September.