Honghua Group has issued a profit alert indicating an expected loss attributable to shareholders of between RMB20 million and RMB40 million for the six months ended 30 June 2026. The guidance contrasts sharply with the RMB37.10 million profit recorded in the same period of 2025, marking a year-on-year swing of up to RMB77.10 million.

Management attributes the projected deficit to two principal factors:

1. Geopolitical and Macroeconomic Pressures • Ongoing instability in the Middle East curtailed demand for the Group’s drilling equipment, shipbuilding and drilling engineering services, resulting in lower-than-expected revenue and profit contributions from the region. • Disruptions to international trade logistics and heightened supply-chain costs further compressed overall gross profit margin.

2. Exchange-Rate Movements • Continued appreciation of the Renminbi against the US dollar triggered substantial exchange losses on USD-denominated assets and receivables. • Although the Group deployed forward contracts and other hedging tools, these measures only partially mitigated currency-related impacts.

The figures are based on unaudited consolidated management accounts and may differ from the final interim results, which are currently being finalized. Shareholders and potential investors are advised to exercise caution when dealing in the company’s shares.