Honghua Group Limited (00196.HK): Profit Warning, Expected Interim Loss of RMB 20 Million to RMB 40 Million

NewTimeSpace News: On 7 July 2026, Honghua Group Limited (00196.HK) issued a profit warning. The Group expects to record a loss attributable to shareholders of around RMB 20 million to RMB 40 million during the reporting period, as compared with a profit of approximately RMB 37.095 million recorded in the corresponding period of last year.

As stated in the announcement, the loss is mainly attributable to the following factors:

First, due to the continuous turmoil of geopolitical situations in the Middle East, the Group’s market expansion for drilling equipment, offshore marine vessels and drilling engineering services in the region faces short-term pressure. The regional revenue contribution and profits are significantly lower than expected. Coupled with disrupted international trade logistics and rising supply chain costs, the overall gross profit margin is under pressure.

Second, the continuous appreciation of Renminbi against the US dollar has led to substantial exchange losses on the US dollar-denominated assets and foreign currency receivables held by the Group.

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