China Star Entertainment Limited reported a marked narrowing of interim losses for the six months ended 30 June 2026, driven by sharply lower operating costs and a surge in gross margin, even as top-line performance fell significantly.

Revenue dropped 62.9% year-on-year to HK$95.31 million, reflecting reduced property sales and softer multi-media turnover. Nevertheless, gross profit slipped only 10.8% to HK$68.13 million, lifting gross margin to 71.5% from 29.8% a year earlier.

Loss attributable to owners narrowed to HK$56.09 million from HK$110.88 million, a 49.4% improvement. Basic and diluted loss per share decreased to HK2.31 cents from HK4.56 cents.

Segment performance • Property development and investment: Revenue contracted to HK$19.59 million (–85.3%), posting a segment loss of HK$72.12 million. Four residential units, one car park and one motorcycle space at Tiffany House were sold for HK$18.94 million. The forthcoming “Lake Yoho” project (Property C7) had secured presale contracts for over 250 units worth more than HK$1.40 billion by 30 June 2026; completions are scheduled to start in 2H 2026 following the July occupation permit. • Multi-media & entertainment: Revenue fell to HK$75.72 million (–38.5%), yet the segment swung to a HK$50.86 million profit from a HK$3.84 million loss, aided by cost controls and a jump in gross merchandise value to RMB1.55 billion. • Film-related operations: Turnover was negligible at HK$5,000, but the segment posted a HK$0.94 million profit, partly due to exchange gains.

Expense profile Administrative expenses declined 28.4% to HK$58.51 million, while marketing, selling and distribution costs were trimmed 67.4% to HK$11.48 million. Finance costs were broadly stable at HK$51.59 million, with HK$51.33 million capitalised to Property C7 construction.

Balance sheet and liquidity Total assets stood at HK$4.45 billion and equity at HK$1.45 billion. Net current assets were HK$1.00 billion, equating to a current ratio of 1.3. Cash, bank balances and restricted cash totalled HK$113.89 million, against total borrowings of HK$1.99 billion, lifting the gearing ratio to 129% from 123% at end-2025. All HK$2.47 billion of available credit facilities were fully drawn at period-end.

Capital commitments Outstanding commitments amounted to HK$442.81 million, primarily HK$409.40 million for Macau property development and HK$17.37 million for film projects.

Outlook Management expects cash flow to improve in 2H 2026 when presold Property C7 units are delivered. The company plans to integrate AI-driven tools to enhance short-drama production and to expand commission-sharing income from online knowledge and property consulting services. No interim dividend was declared.