Zhihua Group (01842.HK) issues a profit warning, expecting a mid-term net loss of approximately HK$10 million to about HK$12 million.

Zhihua Group (01842.HK) announced that, compared to a net loss of approximately HKD 8.5 million for the six months ending June 30, 2025 (first half of 2025), the Group may record a net loss of approximately HKD 10 million to HKD 12 million for the first half of 2026. The expected increase in net loss for the first half of 2026 is mainly due to a decline in revenue and gross margin, primarily attributed to (i) reduced sales to the United States; and (ii) a decrease in sales of medical products, which have historically been higher-margin products. These factors are partially offset by a net gain of approximately HKD 300,000 recognized in the first half of 2026 from financial assets measured at fair value through profit or loss, both realized and unrealized, whereas the first half of 2025 recorded a net loss of approximately HKD 2.7 million from financial assets measured at fair value through profit or loss, both realized and unrealized.