ESSEX BIO-TECH (01061) announced its interim results, with a profit of approximately HKD 111 million, a year-on-year decrease of 32.2%.

ESSEX BIO-TECH (01061) announced its interim results for 2026, with revenue of approximately HKD 785 million, a year-on-year decrease of 10.5%; profit of approximately HKD 111 million, a year-on-year decrease of 32.2%; and earnings per share of HKD 0.1953, with a proposed interim dividend of HKD 0.05 per share. The announcement stated that the decline in revenue was attributed to the new Value-Added Tax (VAT) law in China, which was published on January 30, 2026, and took effect retroactively from January 1, 2026. This law altered the tax treatment for pharmaceutical wholesalers selling general biological products. Previously, these enterprises could opt for a simplified taxation method and pay VAT at a rate of 3%. Now, they are required to pay VAT at the standard rate of 13%, consistent with other pharmaceuticals. This change, along with other newly introduced regulatory challenges, has impacted the group's business (especially the BeiFushu and BeiFuJi series of biological products). This is because the group is unable to pass the increased VAT burden onto end customers, as the VAT-inclusive selling price under China's centralized procurement system is fixed, while revenues are reported exclusive of VAT.