WIN HANVERKY (03322) issues a profit warning, expecting its after-tax loss for the interim period to narrow to approximately HKD 9 million compared to the same period last year.

WIN HANVERKY (03322) announced that based on the current available information and the Groups unaudited consolidated management accounts for the six months ending June 30, 2026 (the "Current Period"), the Group expects to incur a loss of approximately HKD 90 million after tax for the Current Period, compared to a loss of HKD 56 million after tax for the six months ending June 30, 2025 (the "Previous Period"). The expected reduction in after-tax losses for the Current Period is primarily due to the following reasons: (i) the fashion brand and specialty business achieved an operating profit of approximately HKD 35 million during the Current Period (Previous Period: operating profit of HKD 14 million), an increase of HKD 21 million. The significant increase results from revenue growth, effective cost management, and benefits arising from the expansion of the franchising model; (ii) the sportswear production business achieved an operating profit of approximately HKD 5 million during the Current Period (Previous Period: operating loss of HKD 18 million). The successful turnaround from loss to profit is mainly due to the Group's resolution of earlier raw material issues at the production facilities in Southeast Asia, which significantly reduced related production and transportation costs compared to the Previous Period; (iii) financing costs for the Current Period decreased by approximately HKD 2 million compared to the Previous Period, primarily due to the Group's further enhancement of cash management, resulting in savings on bank borrowing interest expenses; and (iv) the positive impacts mentioned above were partially offset by an operating loss of approximately HKD 37 million from the high-performance outdoor apparel production business during the Current Period (Previous Period: operating loss of HKD 17 million). The first half of the year is traditionally the off-peak season for the high-performance outdoor apparel production business, which typically incurs losses. The increase in operating losses was mainly due to a revenue decline of approximately HKD 70 million or 28% to HKD 180 million (Previous Period: HKD 250 million), primarily due to decreased orders and delayed shipments to several clients stemming from reduced demand from a major client. Revenue from the sportswear production business increased by approximately HKD 59 million to HKD 1.251 billion (Previous Period: HKD 1.192 billion), representing an increase of 5%. During the Current Period, the Group successfully resolved the earlier raw material issues faced by the production facilities in Southeast Asia, leading to a significant reduction in related production and transportation costs, coupled with the Group's ongoing implementation of strict cost-control measures, which mitigated the adverse impact of tariffs imposed by the United States on this business. Revenue from the high-performance outdoor apparel production business decreased by approximately HKD 70 million to HKD 180 million (Previous Period: HKD 250 million), a decrease of 28%. The reduction was mainly due to decreased demand, leading to fewer orders placed by a major client and delayed shipments to several customers. Consequently, the operating loss during the Current Period further increased to approximately HKD 37 million (Previous Period: operating loss of HKD 18 million). The delayed shipments have since been delivered and resolved.