ESSEX BIO-TECH (HKEX: 01061) shares experienced a significant drop after the company issued a profit warning. At the time of writing, the stock was down 12.89% to HK$2.5, with a turnover of HK$2.43 million.

The decline follows a company announcement made on July 17. ESSEX BIO-TECH stated that for the six-month period ending June 30, 2026, it expects both revenue and profit to decline compared to the same period in 2025. The group anticipates revenue to decrease by approximately 10% and profit to fall by about 30%.

In the corresponding period of 2025, the company reported revenue of around HK$877 million and a profit of approximately HK$163 million. The primary reason cited for the expected decline is an increase in the value-added tax burden borne by the group following the implementation of new VAT laws in China.

Despite these projected headwinds, the company emphasized that it maintains a robust cash flow and financial position sufficient to meet its operational requirements. As of June 30, 2026, the group's cash and cash equivalents stood at approximately HK$807 million.