SINOMAX GROUP (01418) issues a profit warning, expecting a mid-term profit of approximately HK$20 million.

SINOMAX GROUP (01418) announced that the Group expects to record a profit of approximately HKD 20 million for the six months ending June 30, 2026 (the current period), compared to a profit of approximately HKD 30.4 million for the six months ended June 30, 2025. During the current period, the Group continued to invest in expanding its business in the United States and Europe, including strengthening its sales and marketing capabilities, enhancing brand awareness, and increasing promotional activities, while continuously reinforcing its organizational capacity to support its ever-expanding business operations. These strategic investments supported the Group's revenue growth during the period; however, the increase in related expenditures outpaced the improvement in revenue, resulting in a decrease in the Group's net profit. Nevertheless, the Group continued to streamline operations, with expenses in the second quarter of the current period decreasing compared to the first quarter. In addition to the above, the Group also experienced rising raw material costs during the current period. This was due to developments in the geopolitical situation in the Middle East during March and April 2026, which led to supply chain disruptions and increased procurement costs, resulting in higher raw material and logistics costs. The Group was unable to fully pass on these increased costs to customers during the current period, which impacted the Group's profit.