China Silver Group (00815) has issued a profit warning, projecting a net loss attributable to shareholders of between RMB 15 million and RMB 25 million for the six months ending June 30, 2026. This marks a sharp reversal from the net profit of approximately RMB 54.9 million recorded in the corresponding period of 2025.

After excluding the impact of share-based payment expenses and the loss on deemed disposal disclosed below, the group expects to report a net profit attributable to shareholders of between RMB 66 million and RMB 76 million for the first half of 2026.

The anticipated swing from profit to loss is primarily driven by three factors. First, within the group's manufacturing segment, rising silver prices during the period, coupled with reduced demand across various silver applications, led to lower silver ingot sales. Second, the group recognized share-based payment expenses of approximately RMB 57 million under its share award scheme adopted on June 18, 2025, which increased administrative costs for the period. Third, the group recorded a loss on deemed disposal of approximately RMB 34 million in the first half of 2026, resulting from the dilution of its equity interest in its associate, Chomigold Group Ltd (1815), following the completion of share placements by Chomigold on February 6, 2026, and March 13, 2026, respectively.

These adverse factors were partially offset by an expected increase in gross profit within the manufacturing segment. Despite the decline in silver ingot sales, the segment's gross profit is anticipated to rise, primarily because a significant portion of the silver ingots sold during the period came from inventory purchased at relatively lower costs.