TONGSHIFU (00664) issued a profit warning, expecting a mid-term net profit of 1 million to 1.5 million yuan, a year-on-year decrease.

TONGSHIFU (00664) announced that the Group expects to achieve a net profit of approximately RMB 1 million to RMB 1.5 million for the six months ending June 30, 2026, compared to a net profit of RMB 30.2 million for the same period in 2025; an adjusted net profit (non-International Financial Reporting Standards measure) of approximately RMB 15 million to RMB 20 million, compared to an adjusted net profit of RMB 42.9 million for the same period in 2025; and an adjusted EBITDA (non-International Financial Reporting Standards measure) of approximately RMB 35 million to RMB 40 million, compared to an adjusted EBITDA of RMB 56.2 million for the same period in 2025. The Board believes the decrease in net profit during the reporting period is primarily due to the combined effects of the following factors: 1. Rapid expansion of offline direct-operated stores leading to substantial increases in costs: To promote the construction of a multi-channel sales network strategy, the Group accelerated the expansion of offline direct-operated stores during the reporting period. As of June 30, 2026, the total number of direct-operated stores has reached 65, an increase of 55 from 10 as of June 30, 2025, representing a growth rate of 5.5 times. Related sales expenses, including compensation for sales personnel, store renovation amortization, and rent, as well as administrative expenses related to management personnel, have all increased significantly. These investments are considered pre-operational costs of business expansion, and as the newly opened stores gradually enter a mature operational phase, these pre-operational fixed costs (including store renovation expenses) will be gradually amortized, with economies of scale and contributions to revenue becoming increasingly evident. 2. Phased costs arising from capacity expansion and production line upgrades: To meet future business growth demands, the Group continued to advance the construction and commissioning of the second production center during the reporting period. This project was officially put into operation in the second quarter of 2026, with total production capacity increasing by over 50%. During the capacity expansion process, upgrading production equipment resulted in some scrap losses from old equipment and workshop renovation costs, while initial depreciation and manufacturing costs of the new production line also increased, having a phased impact on net profit during the period. 3. Continued increase in R&D investment: To enrich the product matrix and expand product lines in copper, silver, gold, and other materials, as well as to meet the product development needs associated with new IPs (such as the series "", "", and ""), the Group has continuously expanded its R&D team and increased investment in related licensing fees. These investments aim to lay a foundation for medium- to long-term product innovation and market expansion.