Hong Kong-listed SMC Electric (02381) released its unaudited results for the six months ended 30 June 2026, disclosing a swing to loss and weaker top-line performance amid geopolitical disruptions and higher input costs.

Revenue and Profitability • Revenue declined 26.3% year-on-year to HK$95.84 million, mainly due to lower electric fan and vacuum cleaner sales following Middle East market disruptions linked to the Iran conflict and delayed launches of new products. • Gross profit contracted 53.6% to HK$15.19 million; gross margin narrowed to 15.9% from 25.2% a year earlier, reflecting softer volumes and higher raw-material costs. • The Group recorded a net loss attributable to shareholders of HK$3.34 million versus a profit of HK$12.90 million in 1H 2025. Basic and diluted loss per share stood at HK0.167 cents (1H 2025 EPS: HK0.645 cents).

Segment Breakdown • Fans generated HK$46.03 million (-33.0%). • Vacuum cleaners contributed HK$34.40 million (-30.1%). • Work lights rose 26.8% to HK$15.32 million, partially offsetting declines in other categories.

Cash Flow and Balance Sheet • Cash and bank balances totaled HK$52.50 million at 30 June 2026, down from HK$70.95 million at 31 December 2025. • Net current assets stood at HK$103.32 million; current ratio improved to 3.05x (FY25: 2.77x). • The Group remained debt-free, resulting in a nil gearing ratio. • Capital expenditure reached HK$2.60 million, with outstanding capital commitments of HK$3.40 million.

Dividends • No interim dividend was proposed. • A conditional special dividend of HK$0.04575 per share (total HK$91.50 million) has been declared, payable upon completion of a share sale transaction announced on 31 July 2026. A final dividend of HK$0.005 per share for FY 2025 was approved on 11 June 2026.

Corporate Developments • Controlling shareholder Shell Electric Holdings agreed to sell a 70% stake (1.40 billion shares) in SMC Electric to Mega Nova Holdings for HK$154 million, triggering a mandatory unconditional cash offer under the Hong Kong Takeovers Code upon completion. • No bank borrowings, material acquisitions, disposals, or pledges of assets were recorded during the period; contingent liabilities remain nil.

Outlook Management anticipates 2026 to stay challenging but expects customer demand to remain stable. Cost control and supply-chain management will remain key focus areas as the Group navigates heightened raw-material prices and geopolitical uncertainties.