Arts Optical International Holdings Limited reported consolidated revenue of HK$714.42 million for the six months ended 30 June 2026, a year-on-year increase of 20.08%. Despite the higher turnover and a 3.42% rise in gross profit to HK$181.14 million, the group recorded a net loss attributable to shareholders of HK$13.38 million (H1 2025: HK$15.03 million loss). Loss per share narrowed to 3.46 HK cents from 3.89 HK cents, while results were weighed down by a HK$5.20 million fair-value loss on investment properties and higher local production costs linked to Renminbi appreciation.

Segment performance • Original Design Manufacturing (ODM): Revenue grew 22.88% to HK$465.68 million, representing 65% of group turnover. European customers contributed 48% of divisional sales, followed by the United States at 25% and Asia at 27%. • Distribution: Sales edged up 1.95% to HK$147.03 million, accounting for 21% of group turnover. Europe remained the largest market at 67% of divisional sales. • Lens: Revenue surged 42.28% to HK$101.72 million, lifting the segment’s share of group sales to 14%. Approximately 98% of lens revenue was generated in Asia.

Cash flow and liquidity Net cash generated from operating activities was HK$85.97 million versus a HK$3.07 million outflow a year earlier, aided by stronger sales and lower capital expenditure (HK$17.86 million versus HK$31.36 million). Cash and bank balances stood at HK$158.65 million, partially offsetting total bank borrowings of HK$316.87 million, resulting in a negative net cash position of HK$158.22 million (31 December 2025: negative HK$208.50 million).

Balance-sheet metrics • Inventory fell 7% to HK$256.11 million; inventory turnover shortened to 88 days (H1 2025: 113 days). • Trade and bills receivables declined 9% to HK$376.51 million; debtor turnover lengthened slightly to 96 days (H1 2025: 94 days). • Current ratio remained at 1.2. • Debt-to-equity ratio improved to 58% from 63% at year-end 2025. • Equity attributable to owners was HK$569.22 million, equal to HK$1.47 net asset value per share.

Capital structure and commitments Total bank borrowings dropped to HK$316.87 million (31 December 2025: HK$345.15 million). Investment properties and certain buildings remained pledged against HK$277.44 million of these loans. Outstanding capital commitments amounted to HK$205.94 million, including HK$57.35 million for lens-equipment purchases announced in June 2026.

Dividend The board declared no interim dividend, unchanged from the prior-year period.

Outlook Management described the external environment as challenging amid geopolitical tensions and cost pressures but retained a “cautiously optimistic” stance, citing strategic growth opportunities in the lens and smart-eyewear businesses and an emphasis on prudence, financial discipline and operational resilience.