GLOBAL NEW MAT (06616) has issued a profit warning, expecting a net loss of approximately 50 million to 100 million yuan for the six months ending June 30, 2026, compared to a net profit of about 100 million yuan in the same period last year.

Revenue for the period is projected to be between 2.5 billion and 2.7 billion yuan, representing a growth of approximately 180% to 200% from about 912 million yuan in the prior-year period. The group expects EBITDA to reach 450 million to 500 million yuan, up 30% to 45% from 344 million yuan, with adjusted EBITDA of 500 million to 600 million yuan, reflecting a 16% to 39% increase.

The anticipated loss is primarily attributed to the group's acquisition of Merck KGaA's global surface solutions business, completed in July 2025. This transaction has triggered several non-cash and one-off items, including: fair value adjustments and intangible asset amortization of approximately 130 million to 140 million yuan; one-time transaction costs and professional fees of 20 million to 30 million yuan; and business integration costs totaling 60 million to 70 million yuan, which cover transition service agreement fees and other expenses.

During the review period, the group recognized a non-cash fair value gain of approximately 100 million to 110 million yuan on the derivative component of outstanding convertible bonds, compared to a fair value loss of about 1 million yuan in the year-ago period. Financing costs rose to 70 million to 80 million yuan from 27 million yuan. The combined net impact of these two items on pre-tax profit was a net gain of 20 million to 40 million yuan, versus a net loss of 28 million yuan previously.

The fair value gain is non-cash in nature, fluctuating with the company's share price and other market parameters, and may turn into a fair value loss in future periods. It does not reflect the group's core operating performance. Most of the above items are either non-cash or one-time costs related to the acquisition, and have not materially affected the group's operating cash flow or daily operations. The expected loss is a temporary accounting outcome during the post-merger integration phase. As business integration progresses, synergies materialize, and the debt structure is optimized, medium- to long-term profitability is expected to recover.