Hyfusin Group Holdings Limited reported a sharp fall in interim earnings for the six months ended 30 June 2026, as softer sales, lower margins and higher impairment charges weighed on results.

Financial highlights • Revenue declined 7.53% to HK$341.87 million (1H25: HK$369.84 million), driven mainly by softer demand for scented (-HK$16.68 million) and daily-use candles (-HK$4.59 million), partly offset by higher sales of diffusers and other products (+HK$5.23 million). • Gross profit contracted 14.16% to HK$97.63 million, reducing the gross margin to 28.6% (1H25: 30.7%). Management attributed the margin erosion to lower average selling prices. • Net profit attributable to shareholders fell 56.60% to HK$19.59 million (1H25: HK$45.15 million). Basic earnings per share dropped to 2.13 HK cents from 4.91 HK cents. • Other gains swung to a HK$12.64 million net loss (1H25: HK$3.99 million gain), mainly after a HK$13.43 million impairment provision on trade receivables and reduced foreign-exchange gains. • Operating cash outflow totalled HK$42.58 million versus an inflow of HK$31.97 million a year earlier; overall cash and cash equivalents decreased to HK$367.94 million (31 Dec 2025: HK$405.65 million).

Cost and expense dynamics • Selling and distribution expenses slipped 1.40% to HK$16.45 million. • Administrative expenses fell 12.82% to HK$42.34 million, aided by lower staff costs. • Finance costs declined 25.08% to HK$3.30 million in line with reduced average borrowings.

Balance-sheet position • Total assets rose 11.83% from year-end to HK$963.06 million, supported by higher inventories (HK$197.05 million, +147.3%). • Total liabilities increased to HK$195.02 million (31 Dec 2025: HK$112.69 million) as bank borrowings expanded to HK$30.85 million (31 Dec 2025: HK$8.35 million). • Net assets stood at HK$768.04 million, up 2.62% from year-end; the gearing ratio rose to 4.7% (31 Dec 2025: 1.6%). • The current ratio moderated to 3.7 times (31 Dec 2025: 5.6 times), while undrawn banking facilities totalled HK$89.90 million.

Sales mix and geography • Scented candles remained the core revenue driver, contributing HK$252.17 million or 73.8% of sales. Daily-use candles generated HK$43.77 million (12.8%), diffusers and other products HK$45.91 million (13.4%), and decorative candles HK$0.02 million. • The United States accounted for 93.1% of revenue (HK$318.25 million), followed by the United Kingdom at 6.8% (HK$23.12 million).

Capital expenditure and commitments • Hyfusin invested HK$23.07 million in property, plant and equipment, primarily to enhance automation at its Vietnam facilities. Outstanding capital commitments totalled HK$0.30 million at period-end.

Dividend The board declared no interim dividend for the first half of 2026.

Outlook considerations Management highlighted ongoing monitoring of U.S. trade policies, efforts to boost sales through specialised representatives, and a focus on operational efficiency. No material post-period events or significant investment plans were disclosed.