ZALL SMARTCOM (02098) has issued a profit warning, indicating a significant swing to a net loss for the interim period.

The company projects a net loss of approximately RMB 1.2 billion for the first half of 2026, a stark contrast to the net profit of around RMB 70 million recorded for the six months ended June 30, 2025.

This anticipated downturn is primarily attributed to valuation losses on investment properties. While gains from newly transferred properties held for leasing purposes provided some offset, the combined impact of lower occupancy rates and a year-on-year decrease in property income is expected to result in a net valuation loss of roughly RMB 1.1 billion for the period. This reverses the valuation net gain of about RMB 306 million seen in the corresponding half of 2025.