Chervon Holdings Limited released unaudited results for the six months ended 30 June 2026, delivering its strongest first-half performance to date amid robust demand for its original brand manufacturing (OBM) products.
Revenue and earnings • Revenue rose 12.8% year on year to US$1.03 billion, topping the US$1 billion mark for the first time in a half-year period. • Gross profit increased 33.0% to US$404.24 million, lifting the gross margin by 600 basis points to 39.3% on a richer OBM mix, higher efficiency and tariff refunds. • Profit for the period advanced 11.6% to US$106.34 million; adjusted net profit, which excludes the prior-year disposal gain, surged 39.9% to the same level. • Basic earnings per share improved 10.5% to US$0.21.
Segment and geographic trends • Outdoor Power Equipment (OPE) revenue climbed 13.9% to US$685.58 million, while Power Tools sales grew 11.1% to US$339.64 million. • OBM contributed 79.6% of total revenue, underpinned by the continued momentum of flagship brand EGO. • Regional sales: North America +14.9%, Europe +11.1%, Rest of World +17.2%; China declined 7.2%.
Cost structure and profitability • Selling and distribution expenses rose 25.6% to US$162.24 million on channel expansion and marketing spend. • R&D investment increased 17.0% to US$46.79 million, maintaining R&D intensity at 4.5% of revenue. • Net finance costs fell to US$1.71 million (-36.0%), reflecting optimized funding mix. • Net profit margin was broadly steady at 10.3% (H1 2025: 10.4%), as operating cost inflation offset part of the gross-margin gain.
Cash flow and balance sheet • Net cash from operating activities halved to US$129.46 million, mainly due to higher receivables (turnover days: 94 vs 83 a year earlier). • Inventory fell 17.7% to US$368.70 million, reducing turnover days to 118 from 161. • Cash and cash equivalents stood at US$372.21 million at end-June, exceeding total bank loans of US$252.82 million; the gearing ratio remained at 0.3. • Capital expenditure reached US$47.16 million, while committed future capex rose to US$105.66 million, largely for Vietnam capacity expansion.
Shareholder returns • The board declared an interim dividend of HK$0.3258 per share (approximately US$0.0418), amounting to about US$21.30 million; no interim dividend was paid in H1 2025. • By 30 June 2026 the company had repurchased 1.85 million shares for HK$29.4 million under its HK$150 million buy-back programme approved in May.
Management outlook The company highlighted that tariff headwinds from 2025 have been mitigated through product mix upgrades, pricing actions and diversification of manufacturing to Vietnam. Management expects these strategic moves, combined with continued innovation and channel expansion, to support sustained long-term growth.