ASIA TELE-NET (00679) issues a profit warning, expecting a net loss of no more than HK$20 million in the first half of the year.

ASIA TELE-NET (00679) announced that the group expects revenue to grow from HKD 237 million to HKD 424 million. The revenue growth is mainly attributed to the groups core business - the electroplating equipment division, whose revenue increased from HKD 214 million to HKD 406 million, representing a 90% increase. This growth is primarily driven by the following factors: (i) the large-scale construction of data centers has led to strong demand for high-density interconnect boards (HDI boards); (ii) the upgrade in artificial intelligence (AI) computing power has spurred strong demand for 1.6T high-speed optical modules. The traditional subtractive electroplating process can no longer meet the production demands of these high-end products, and major manufacturers in the PCB industry have now shifted to using the improved semi-additive process (mSAP). The companys SVCP products perfectly meet the market demand for mSAP. The net profit of the company's electroplating equipment division is expected to grow by no less than 50%. Nevertheless, compared to the net profit of approximately HKD 14.4 million for the six months ending June 30, 2025, the group expects a net loss of no more than HKD 20 million for the six months ending June 30, 2026. The main factors contributing to the decline in net profit include: (i) losses due to changes in fair value of trading investment products and (ii) a decrease in losses related to changes in fair value of investment properties. As of December 31, 2025, the group holds a portfolio of Hong Kong-listed shares valued at approximately HKD 240 million. In late June, the Hong Kong stock market fell significantly, with the Hang Seng Index dropping from 25,630 points on December 31, 2025, to 22,881 points on June 30, 2026, a decline of 11%. In light of this, the group anticipates a fair value loss of HKD 28.1 million on these listed shares during this reporting period, compared to a fair value gain of HKD 30.7 million in the previous period. Commercial property prices in mainland China and Hong Kong continue to be weak, mainly due to oversupply and relatively weak local demand. Therefore, the group expects to incur a fair value loss of approximately HKD 29.6 million on investment properties during this reporting period, compared to a loss of about HKD 53 million in the previous period. In addition, the portfolio of Hong Kong-listed stocks and commercial properties held by the group continues to generate stable and regular income. The related fair value losses have not negatively impacted the group's daily operations or cash flow.