GAPACK (SEHK: 00468) has issued a profit alert announcement.
The company expects its group revenue for the six-month period ending June 30, 2026, to be between approximately RMB 732 million and RMB 990 million, compared to RMB 1.007 billion for the same period in 2025, representing a decrease of about 1.6% to 27.3%.
The company anticipates a net profit for the period in the range of approximately RMB 3.4 million to RMB 10.2 million, a significant drop from the RMB 83 million recorded in the corresponding period of 2025, translating to a decline of about 87.7% to 95.9%.
The decrease in revenue is attributed to changes in export order processing starting from 2025.
Export orders are now first routed through subsidiaries held by the international business before being placed with the company, leading to a reduction in the unit price from these orders.
Additionally, the total volume of such orders has also decreased.
The decline in net profit is primarily due to two factors.
First, the change in order routing means export orders are placed by international business subsidiaries rather than directly by third-party customers, resulting in lower revenue and gross margin associated with the international business.
Second, a change in the accounting treatment for the company's investment interest in Greatview Holdings International Limited, effective March 2025, coupled with a pending court application for access to relevant financial information, has prevented the company from recognizing its share of investment profits compared to the same period in 2025.
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