Sinocera Group (01418) is forecasting a profit margin of around HK$20 million in the medium term

According to the Zhitong Finance App, Sinos Group (01418) announced that the Group expects to record a profit of approximately HK$20 million for the six months ended June 30, 2026 (this period), compared with a profit of about HK$30.4 million for the six months ending June 30, 2025.

During this period, the Group continued to invest in expanding its business in the US and Europe, including strengthening sales and marketing capabilities, increasing brand awareness and promotion activities, and continuing to strengthen organizational capabilities to support its expanding business operations. These strategic investments supported the Group's revenue growth during the period, but the increase in related expenses outweighed the improvement in earnings, leading to a decrease in the Group's net profit. Despite this, the Group continued to streamline operations, and expenses in the second quarter of the period decreased compared to the first quarter.

In addition to the above, the Group also experienced an increase in material costs during this period. This is due to supply chain disruptions and rising procurement costs due to the development of the geopolitical situation in the Middle East during March and April 2026, leading to an increase in material and logistics costs. The Group was unable to fully pass on these increased costs to customers during this period, thereby affecting the Group's profits.