Townray Hldgs (SEHK: 01692) has issued a profit warning, indicating a significant decline in earnings for the first half of the year.

The group anticipates its unaudited profit attributable to owners for the six months ending June 30, 2026, will be approximately HK$18.9 million.

This figure represents a substantial decrease compared to the unaudited profit of about HK$30.1 million recorded for the same period ending June 30, 2025.

The projected decline amounts to roughly HK$11.2 million, equating to a decrease of approximately 37.1%.

Primary Factors for Profit Decline

The board of directors attributes the expected drop in profit to several key factors.

Firstly, the group experienced a reduction in overall revenue during the period.

Secondly, persistent geopolitical tensions led to a significant increase in the cost of direct raw materials.

This increase was partially offset by a reduction in the group's direct labor and indirect costs.

Thirdly, the company faced a foreign exchange loss, contrasting with a foreign exchange gain in the prior comparative period.

This shift is primarily attributed to the appreciation of the Renminbi against the US dollar.

Finally, the period saw a net impairment on trade receivables, whereas the previous period benefited from a net reversal of such impairments.