SINOHYTEC (02402) has issued a profit warning, indicating that its net loss for the six months ending June 30, 2026, is expected to narrow by approximately 35% to 45% compared to the same period in 2025.

The anticipated improvement is attributed to several key factors. First, during the reporting period, the group deepened its supply chain collaboration management, accelerating inventory turnover and thereby reducing sales costs year-on-year. Concurrently, the company continued to execute its cost-reduction and efficiency-enhancing strategy, leading to lower operating expenses in sales, administration, and research and development compared to the previous year.

Second, the group recorded an increase in the reversal of previously accrued bad debt provisions, which shifted the net impairment loss on financial assets from a net loss to a net gain. Additionally, due to a reduced shareholding in certain associates, the group’s share of losses from these equity-accounted investees decreased year-on-year. Collectively, these factors positively contributed to the narrowing of the interim loss.