KING'S FLAIR (06822) has issued a profit warning, projecting a loss attributable to equity holders of approximately HK$12.4 million for the six months ending June 30, 2026 (the Reporting Period). This compares to a loss of about HK$40.9 million in the same period last year (the Prior Period).

The expected reduction in losses is primarily attributed to a combination of factors. Revenue fell from approximately HK$250 million in the Prior Period to about HK$229 million in the Reporting Period, mainly due to uncertain market sentiment and the ongoing ambiguity surrounding US tariffs and expansion policies.

Other income and net gains shifted from a loss of around HK$6.8 million in the Prior Period to a gain of about HK$8.5 million in the Reporting Period. This improvement was largely driven by a fair value gain on investment properties of approximately HK$6.1 million in the Reporting Period, compared to a fair value loss of HK$16.9 million in the Prior Period.

Gross profit increased from HK$51.5 million in the Prior Period to HK$59.3 million in the Reporting Period. This was due to an improvement in gross margin from approximately 20.5% in the Prior Period to about 25.9% in the Reporting Period, as a result of tighter production cost controls.

Effective cost control measures for administrative and operational expenses also contributed to a reduction in administrative costs.