Leadway Tech (02086) issues a profit warning, expecting the first-half year performance to turn from a profit to a loss of approximately 5.2 million Hong Kong dollars year-on-year.

Leadway Tech (02086) announced that the group is expected to record a net loss of approximately HK$5.2 million in the first half of 2025, compared to a net profit of HK$2.1 million in the same period in 2024. The Board of Directors attributes the change from a net profit to a net loss primarily to the following factors: a decrease in total revenue of approximately 13.5% to HK$40.83 million (from HK$47.21 million in the previous period). This decrease is mainly driven by a decrease in the group's income, reflecting the adverse impacts of the slowdown in the global economy, ongoing tariff disputes, and the unstable trade environment in 2025. Increased economic uncertainty (including concerns over tariffs and unstable geopolitical situations) has led to customers being more cautious when placing orders, resulting in a decrease in product demand and a reduction in income during the period. Employee costs increased by approximately 10.8% to HK$16.98 million, mainly due to the introduction of a sales incentive plan and the expansion of the technical and research and development departments to meet the continuous demand for product development. Additionally, total administrative expenses significantly increased by approximately 94% to HK$7.35 million, mainly due to the company's expansion into new markets and diversification of its product portfolio, leading to increased resources for upgrading backend systems and increased administrative operating expenses. The number of trade shows in the first half of the year increased, and efforts to strengthen relationships with business partners led to an increase in business travel expenses.