SUN.KING TECH (00580) issued a profit warning, expecting shareholders to report a loss of nearly 30 million yuan in the first half of the year.

SUN.KING TECH (00580) announced that the group expects to generate revenue of approximately RMB 1.268 billion for the six months ended June 30, 2026, representing an increase of about 42.7% compared to the six months ended June 30, 2025. This increase is mainly due to the group's concentrated delivery of products for the Gansu-Zhejiang Flexible DC Transmission Project, including DC support capacitors and DC support capacitor online monitoring systems. However, the group is expected to incur a net loss of approximately RMB 30 million attributable to the owners of the parent company, whereas a net profit of approximately RMB 94 million attributable to the owners of the parent company was achieved for the six months ended June 30, 2025. The expected loss is mainly due to: (a) a decrease in the Swiss franc exchange rate resulting in a net loss of approximately RMB 59 million in fair value of foreign exchange forward contracts, while a net gain of approximately RMB 60 million was recorded for the six months ended June 30, 2025. Foreign exchange forward contracts are signed by the group to mitigate exchange rate risks associated with foreign currency purchases. Although there was a fair value loss on these contracts during the reporting period, the covered purchase costs will decrease; (b) a decrease in the Swiss franc exchange rate resulting in a decrease of approximately RMB 25 million in exchange gains compared to the six months ended June 30, 2025; (c) increased investment in research and development for new products, leading to an increase of approximately RMB 22 million in R&D expenses compared to the six months ended June 30, 2025; (d) expiration of government subsidies for the self-developed power semiconductor project, resulting in a decrease of approximately RMB 16 million in government subsidies compared to the six months ended June 30, 2025.