EAGLE NICE (02368) Issues Profit Warning: Expects Interim Profit Attributable to Shareholders to Decrease Significantly by Approximately 40% to 45% Year-on-Year

EAGLE NICE (02368) Issues Profit Warning: Expects Interim Profit Attributable to Shareholders to Decrease Significantly by Approximately 40% to 45% Year-on-Year EAGLE NICE (02368) announced that it expects the profit attributable to owners of the Company for the six months ended September 30, 2026 (the Reporting Period) to decrease significantly by approximately 40% to 45% compared with the profit of HK$205 million for the corresponding period last year. Based on information currently available to the Company, the expected significant decrease in profit is primarily attributable to the following multiple challenges: (i) Impact of rising labor and indirect production costs: In line with the Group's long-term cross-regional capacity expansion plan, multiple new factories have successively commenced production as scheduled since the second quarter of the fiscal year ended March 31, 2026 (the Previous Fiscal Year), resulting in increases in the number of employees and wages, depreciation of plant and equipment, and other indirect production costs during the Reporting Period. Production costs have also further increased due to upward adjustments in statutory minimum wages across various regions and inflation; (ii) Weak demand due to economic uncertainty: Amid the global economic downturn and the adverse impact of U.S. tariff policies on consumer sentiment and the weakening consumer market, the Group's brand customers adopted a more conservative and prudent bargaining attitude toward the selling prices proposed to the Group during the Reporting Period, resulting in a decline of approximately 3.0% in the Group's sales compared with the corresponding period last year; (iii) Impact of production scheduling disruptions caused by U.S. tariffs: The tariff policies implemented by the U.S. government since the first quarter of the Previous Fiscal Year have had far-reaching effects and continued to adversely affect the Group's supply and production chains. During the Reporting Period, the impact became increasingly evident, causing disruptions to the production scheduling of the Group's production bases in mainland China and Southeast Asian countries, thereby increasing distribution and production costs; and (iv) Impact of the appreciation of RMB against HKD: During the Reporting Period, the monthly average exchange rate of RMB against HKD appreciated by approximately 5% to 7% compared with the corresponding period last year. The rapid appreciation of RMB during the Reporting Period adversely affected the operating costs of the Group's factories in mainland China and the revaluation of the Group's RMB-denominated current liabilities.