Kasen International Holdings (00496) reported interim revenue of RMB 530.55 million for the six months ended 30 June 2026, a 4.7% increase from RMB 506.54 million a year earlier, supported by stronger upholstered-furniture sales.

Gross profit slipped 1.4% year on year to RMB 174.53 million as the consolidated gross margin contracted to 32.9% from 35.0%, reflecting higher raw-material costs and a weaker U.S. dollar. Rising expenses and a sharp swing in foreign-exchange gains turned last year’s RMB 22.59 million profit attributable to shareholders into a RMB 5.90 million loss. Group net loss stood at RMB 22.70 million versus a RMB 35.65 million profit in H1 2025.

Segment performance: • Manufacturing & Trading of Upholstered Furniture delivered revenue of RMB 330.93 million, up 15.9%, but segment profit halved to RMB 13.18 million amid cost inflation and currency headwinds. • Property Development revenue fell 15.6% to RMB 57.71 million as project deliveries slowed, generating a RMB 20.69 million loss. • Special Economic Zone operations in Koh Kong, Cambodia, booked RMB 110.52 million in revenue, down 7.8%, though still produced RMB 37.70 million profit. • “Others” (tourism, catering, property management) contributed RMB 31.40 million, slightly below last year; segment profit recovered to RMB 0.92 million.

Operating expenses rose: selling & distribution costs increased 21.8% to RMB 31.35 million, while administrative expenses grew 9.6% to RMB 90.16 million due to staffing at the new Cambodian plant. Finance costs eased 11.2% to RMB 15.90 million following full conversion of earlier-issued convertible bonds in June 2025. A net foreign-exchange loss of RMB 24.55 million reversed a small gain a year ago, driving total other gains and losses to a RMB 22.66 million deficit.

Liquidity and leverage: cash and cash equivalents halved to RMB 140.52 million from RMB 291.83 million at end-2025, while total borrowings narrowed to RMB 937.25 million (31 December 2025: RMB 990.49 million). The gearing ratio improved to 23.9% from 25.0%. Bank borrowings due within one year fell to RMB 169.59 million (31 December 2025: RMB 215.44 million).

Working-capital metrics were mixed. Inventory rose 6.3% to RMB 93.68 million, yet inventory days improved to 68 from 72. Receivables and payables cycles stayed broadly stable at 46 and 68 days respectively.

Capital expenditure totaled RMB 182.72 million, chiefly for the Cambodian manufacturing hub. Outstanding capital commitments amounted to RMB 2.59 billion, including RMB 2.19 billion for plant and equipment and RMB 0.41 billion for land and property developments.

No interim dividend was declared. Management will continue to consolidate upholstered-furniture production in Cambodia, accelerate development of the Koh Kong Zhejiang SEZ, and seek partners or asset disposals for property projects in Hainan and Changbai Mountain, aiming to stabilise sales and restore profitability.