MEGAIN Holding (Cayman) Co., Ltd. (Stock Code: 06939) has issued a profit warning, forecasting a net loss attributable to shareholders of not less than RMB60.00 million for the year ended 31 December 2025. This marks a sharp turnaround from the RMB9.66 million net profit recorded in 2024.

Management attributes the expected loss to four main factors:

1. Margin Compression: Intense competition in the compatible printer-cartridge chip market has significantly eroded gross profit margin. 2. Higher Selling & Distribution Costs: Expanded marketing efforts to develop new segments—such as Internet-of-Things (IoT) chips and online sales—lifted selling and distribution expenses. 3. Rising Administrative Expenses: Relocation of the Group’s mainland China headquarters and the write-off of certain raw material costs pushed administrative spending higher. 4. Asset Impairments: A “significant” rise in impairment provisions on property, plant and equipment, intangible assets and prepayments was recorded, reflecting the operating loss anticipated for the period.

The figures are based on unaudited management accounts and other information currently available. Final audited results are expected by end-March 2026. The Board advises investors that the profit warning constitutes a profit forecast under Rule 10 of the Hong Kong Takeovers Code; however, due to timing constraints it has not yet been reported on by the Company’s financial advisers or auditors.

The announcement follows previous joint disclosures regarding a mandatory unconditional cash offer for all issued shares not already held by the Offeror and its concert parties. MEGAIN cautions shareholders and potential investors to exercise prudence when dealing in its shares until the audited financials are released.