Hong Wei (Asia) Holdings released its unaudited results for the six months ended 30 June 2026, posting a sharp turnaround to profit and a materially stronger gross margin despite lower sales.
Revenue and Profitability • Revenue fell 17.9 % year-on-year to HK$41.00 million, mainly due to mid-year production shutdowns and technology upgrades that curtailed particleboard output. • Gross profit reached HK$1.90 million versus a HK$9.61 million gross loss a year earlier, lifting gross margin to 4.6 % from –19.3 %. • Other income surged to HK$58.18 million (2025: HK$3.88 million) after a HK$58.99 million gain on the derecognition of a note payable. • After finance costs of HK$7.62 million, the Group recorded profit attributable to owners of HK$15.80 million, compared with a HK$59.25 million loss in the prior-year period. Basic earnings per share were 21.71 HK cents (2025: loss of 111.78 HK cents). No interim dividend was declared.
Segment Performance • Particleboard: segment revenue declined to HK$40.95 million; segment result was a HK$34.40 million loss due to lower sales volume and shutdown-related costs. • Forestry: no revenue recognised; segment posted a small HK$0.18 million profit as harvesting quotas remain curtailed under PRC environmental policies.
Balance Sheet and Liquidity • Cash and cash equivalents stood at HK$2.39 million; net current assets were HK$85.25 million with a current ratio of 1.5x. • Total borrowings amounted to HK$316.34 million, giving a gearing ratio of 3.5x; 81 % of borrowings are secured. • Net cash from operating activities was HK$1.33 million, reversing a HK$6.99 million outflow a year earlier.
Post-Period Capital Raise On 20 July 2026 the company completed a rights issue and placing, issuing 280.32 million new shares at HK$0.13 each, raising gross proceeds of HK$36.44 million (net: HK$35.47 million). Funds are earmarked for repayment of notes and loans, fixed-asset investment and working capital.
Outlook Management intends to enhance production efficiency at the Quan Zhu bamboo particleboard line and maintain stringent cost controls amid subdued domestic demand and continued forestry quota restrictions.