Junsi Group (01412)'s profit warning expects the comprehensive profit to be accounted for by equity shareholders in the medium term not exceeding HK$10 million

According to Zhitong Finance App News, Junsi Group (01412) announced that the Group expects that the six months ending June 30, 2026 (the first six months of 2026) will record a comprehensive profit attributable to the Company's equity shareholders of no more than HK$10 million, while the six months ended June 30, 2025 (the first six months of 2025) will be approximately HK$38.6 million.

The Board believes that the expected decrease in profit is mainly due to the Group's gross margin of original equipment manufacturer (OEM) sales falling in the first six months of 2026 compared to the first six months of 2025. The decline in gross margin was mainly due to: (a) the continued appreciation of RMB against the Hong Kong dollar, driving up the Group's production costs; (b) rising raw material costs, which took time to partially reflect in customer pricing; and (c) the introduction of additional product categories in the Group's Vietnam plant during the period, and the optimization of production efficiency required more time to achieve overall stability. Based on anticipated improvements in production efficiency and stable customer relationships, the Group believes that these factors are transitive and remains confident in its long-term prospects.