ESSEX BIO-TECH (01061) has released its interim results for the first half of 2026, reporting a turnover of approximately HK$785 million, a decrease of 10.5% compared to the same period last year. Net profit stood at around HK$111 million, down 32.2% year-on-year. Earnings per share reached 19.53 HK cents, with an interim dividend of 5 HK cents per share declared.

The decline in turnover is attributed to a new value-added tax (VAT) policy in China, announced on January 30, 2026, and retrospectively effective from January 1, 2026. This change has altered the tax treatment for pharmaceutical wholesale enterprises selling ordinary biological products. Previously, these companies could opt for a simplified tax calculation method at a 3% VAT rate. They are now required to pay tax at the standard rate of 13%, consistent with other pharmaceuticals. This adjustment, along with other new regulatory challenges, has impacted the group's operations, particularly its 贝复舒® and 贝复济® series of biological products. The impact stems from the company's inability to pass on the increased VAT burden to end customers, as the selling prices under China's centralized procurement system, which include VAT, are fixed. The turnover figures have been reported net of VAT.