SMC ELECTRIC (02381) issues profit warning, expecting a mid-term loss of approximately HK$2 million to HK$5 million attributable to shareholders, turning from profit to loss year-on-year.

SMC Electric (02381) announced that the group is expected to incur a loss of approximately HK$20 million to HK$50 million for the six months ending on June 30, 2026, as compared to a profit of approximately HK$128.96 million for the six months ending on June 30, 2025. The Board of Directors believes that the shift from profit to loss is mainly due to a significant decrease in gross profit. The significant decrease in gross profit is mainly attributed to the adverse effects of the conflict between the United States and Iran, which has caused a halt in the group's sales in the Middle East market and increased the costs of various raw materials purchased by the group. Several new products that were originally scheduled to be shipped in the first half of this year were delayed due to product design updates, resulting in the deferral of product delivery and revenue recognition to the second half of the year. Additionally, the challenging economic environment has weakened market demand, leading to a decrease in customer orders.