China Star Entertainment Ltd (00326) has issued a profit warning, indicating that it expects to record a loss attributable to shareholders of between HK$50 million and HK$62 million for the six months ending 30 June 2026. This represents a reduction of approximately 44% to 55% compared with the loss of HK$111 million reported for the corresponding period in 2025.

The anticipated narrowing in losses is primarily attributable to a decrease in property inventory write-downs to approximately HK$16 million (versus HK$43.944 million in the prior corresponding period). Additionally, while revenue and related marketing, selling, and distribution expenses are projected to decline by approximately 60% to 70%, the company has experienced improved gross margins and a reduction in administrative expenses.

These findings are based on a preliminary review of the group's unaudited consolidated management accounts for the period, along with information currently available to the board of directors.