ELEPHANT HLDGS (08635) issues profit warning, expecting a net loss of about 5.4 million Hong Kong dollars in the midterm.

ELEPHANT HLDGS (08635) announced that the group is expected to record a net loss of approximately HK$5.4 million for the six months ending September 30, 2025, compared to a net loss of approximately HK$6.7 million for the six months ending September 30, 2024. The board of directors believes that the decrease in net loss is mainly due to revenue generated by the new Artificial Intelligence (AI)-driven solutions division. This division serves as the implementation platform for the group's financial trading solutions and other information technology services, focusing on AI and advanced technology operations. Additionally, to control costs, the group has hired more employees in the People's Republic of China, resulting in a decrease in employee welfare expenses. However, the decrease in net loss is partially offset by the following factors: (i) increased cost of goods sold, primarily due to the sale of physical gold; (ii) increased subcontracting costs generated by the AI-driven solutions division; and (iii) other expenses, mainly related to increased legal and professional fees associated with a comprehensive tender offer, as well as increased marketing expenses for the precious metals trading services division during the reporting period.