YUE YUEN IND (00551) has released its interim results for the six months ended June 30, 2026, with group revenue reaching $3.972 billion, down 2.2% year-on-year. Profit attributable to equity holders plunged 57.9% to $71.998 million, translating to basic earnings per share of 4.49 cents. The board declared an interim dividend of 0.4 HKD per share.

Revenue from the group's manufacturing operations faced pressure as conservative end-demand for inventory restocking, driven by macroeconomic uncertainties, tariff policies, and inflation risks, led brand customers to adopt more cautious ordering patterns. This resulted in heightened order volatility during the period. Additionally, the manufacturing segment's gross margin continued to be constrained by rising costs and declining production efficiency.

As part of the group's long-term capacity expansion strategy, new factory sites are still ramping up, causing a year-on-year increase in the manufacturing workforce. Combined with rising wages across various regions and failure to meet set targets for reducing overtime and other inefficiencies, overall labor and manufacturing overhead costs escalated. The first quarter of 2026 posed challenges as long holidays overlapped across the group's three major production bases, complicating production scheduling. The second quarter saw increasing monthly order volatility across factories, making scheduling difficult, while geopolitical and supply chain uncertainties added further disruption. Despite the group's proactive efforts to coordinate order timing to mitigate these effects, manufacturing facilities continued to face severe capacity utilization imbalances throughout the period, negatively impacting overall production efficiency.