Man Wah Holdings (01999) reported a 12.1% year-on-year decline in profit attributable to shareholders to HK$1.81 billion for the financial year ended 31 March 2026 (FY2026), as softer mainland demand and higher selling costs offset steady overseas sales.

Revenue slipped 2.8% to HK$16.43 billion, with gross profit down 5.3% to HK$6.48 billion. The gross margin narrowed by 1.1 percentage points to 39.4%, reflecting intensified price competition, a softer domestic market and higher operating expenses.

Segment performance • Sofas & ancillary products: HK$11.25 billion, ‑4.2% YoY; margin 39.9% (-1.0 ppt). • Bedding & ancillary products: HK$2.20 billion, ‑8.7% YoY; margin 41.9% (-0.1 ppt). • Other products (chairs, mechanisms, smart parts): HK$1.84 billion, +10.3% YoY; margin 27.1% (-2.2 ppt). • Home Group (European sofa unit): HK$0.80 billion, +2.9% YoY; margin 31.0% (-1.7 ppt). • Other businesses (property, hotel, fit-out, leasing): HK$0.34 billion, +9.8% YoY; margin 96.1%.

Geographically, sales in the PRC (including Hong Kong and Macau) fell 6.3% to HK$9.59 billion, reducing the domestic share of revenue to 58.4%. North America rose 2.6% to HK$4.54 billion, while Europe added 4.2% to HK$1.65 billion. Other regions contributed HK$0.66 billion (-1.1%).

Cost dynamics Cost of goods sold eased 1.1% to HK$9.95 billion as lower leather, steel, wood and chemical prices offset higher labour (+3.9%) and overhead (+10.2%) costs. Selling and distribution expenses climbed 8.7% to HK$3.34 billion, driven by a 27.7% jump in advertising and e-commerce promotion and a surge in US tariff payments on Vietnam-sourced exports (HK$283.40 million vs. HK$7.99 million previously). Administrative and other expenses increased 6.7% to HK$0.80 billion.

Balance sheet and cash flow • Cash and bank balances: HK$3.32 billion (31 Mar 2025: HK$4.01 billion). • Short-term borrowings: HK$4.24 billion; long-term borrowings: HK$0.00 billion. • Current ratio: 1.4; gearing ratio: 29.9% (31 Mar 2025: 33.2%). • Capital commitments: HK$0.67 billion for property, plant, equipment and right-of-use assets.

Dividend The Board proposes a final dividend of HK$0.09 per share. Combined with the interim dividend of HK$0.15 already paid, total dividends for FY2026 will reach HK$0.24 per share, representing a 51.3% payout of attributable profit. The final dividend is subject to shareholder approval at the AGM on 3 July 2026 and is scheduled for payment on 22 July 2026 to shareholders on record as of 13 July 2026.

Strategic developments • In December 2025, Man Wah acquired US-based Gainline Group for US$58.67 million (HK$457.63 million), adding eight manufacturing plants in Mississippi and expanding its North American footprint. • Foreign exchange exposure remains largely unhedged; revenue is mainly in RMB and USD. • Indirect subsidiary Remacro Technology began trading on China’s NEEQ on 1 April 2026.

Outlook Management flagged continued headwinds from global interest-rate uncertainty, geopolitical tensions and raw-material volatility. Strategic focus will remain on refining domestic store networks, scaling online channels, advancing intelligent product features and deepening global supply-chain diversification across China, Vietnam, Mexico, the US and Europe.