EXTRAWELL PHAR (HKEX: 00858) has issued a profit warning announcement. The group anticipates recording a loss of at least HK$950 million for the fiscal year ending March 31, 2026. This contrasts with the profit reported for the year ended March 31, 2025.

Reasons for the Loss Forecast

The expected shift from profit to loss is primarily attributed to several non-cash items. These include (i) an unrealized loss provision of between HK$800 million and HK$850 million on the group's investment in convertible bonds issued by Star Tai Chain Group Limited, whose shares have been suspended from trading on the Stock Exchange since May 6, 2026. This compares to a fair value gain recorded for the same item in the corresponding period last year. Additionally, (ii) there are impairment provisions totaling approximately HK$140 million related to the group's equity interest in an associate company and a receivable loan from that associate.

Operational Performance

Despite the significant non-cash charges, the company stated that the performance of its operating segments remained stable during the fiscal year ended March 31, 2026.