TIAN CHANG GP (02182) has released an announcement containing a profit alert. Based on a preliminary review by the board of the group's unaudited consolidated management accounts and currently available information for the six months ending June 30, 2026, the group expects to record revenue in the range of HK$1.7 billion to HK$1.75 billion.

This represents a decrease of approximately 33% to 31% compared to the revenue of HK$2.54 billion achieved in the corresponding period ending June 30, 2025.

Furthermore, the group anticipates reporting a pre-tax loss between HK$30 million and HK$35 million for the six-month period ending June 30, 2026.

This projected loss marks a significant increase of about 233% to 289% from the pre-tax loss of HK$9 million recorded in the prior comparable period.

Reasons Behind the Deteriorating Performance

The board attributes the expected increase in net loss primarily to two key factors.

First, the persistently uncertain global business climate continues to negatively impact consumer sentiment and client purchasing decisions.

This has led to weak market demand and a reduction in product orders received by the group, consequently causing the decline in revenue.

Second, the decrease in sales and production volume has resulted in a lower gross profit margin.

As production volume falls, fixed manufacturing costs are allocated across a smaller production base, leading to higher fixed costs per unit sold.

This has adversely affected the group's overall gross margin.