TIANNENG POWER (00819) has issued a profit warning, forecasting a sharp drop in net profit attributable to shareholders for the first half of the fiscal year.
According to the company's announcement, based on preliminary reviews of available data and management accounts for the six months ending June 30, 2026, the group expects overall revenue to fall slightly by about 5% to 8% compared to the same period last year. However, profit attributable to shareholders is projected to plunge by approximately 62% to 66% year-on-year.
The board attributes the expected revenue decline primarily to the company's proactive reduction of its trading business, though manufacturing revenue is expected to grow by roughly 5% to 9% compared to the prior-year period. The expected profit downturn is driven by persistently high prices of upstream raw materials such as sulfuric acid, combined with intensified competition in downstream industries and a weaker-than-anticipated recovery in consumer demand. These factors have put significant downward pressure on the company's gross profit margins.
Additionally, changes in policy adjustments, such as the reduction in the value-added tax credit for advanced manufacturing enterprises in mainland China, have led to a drop in other income compared to the same period last year. Together, these challenges have further narrowed the company's overall profit range.
Despite these headwinds, the board remains confident in the group's long-term prospects. The manufacturing business is expected to see revenue growth of 5% to 9% from the prior year, while core lead-acid battery sales volumes remain stable. The company's market leadership, brand strength, and robust distribution and customer base are intact. The synergistic benefits from the battery recycling business are also becoming more evident, and the company's lithium-ion battery operations, along with overseas market expansion, are progressing steadily.
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