Shengbai Holdings (02340) issued a profit warning. It is expected that losses attributable to shareholders in the medium term will increase from HK$24 million to HK$28 million year-on-year

According to the Zhitong Finance App, Shengbai Holdings (02340) announced that the Group expects to achieve the following financial results for the six months ended June 30, 2026 (this period): (1) the earnings for the current period will increase by about 45% to 50% over the six months ended June 30, 2025 (the previous period); and (2) the losses attributable to equity holders of the Company during the period ranged from HK$24 million to HK$28 million, while the loss attributable to equity holders of the Company during the previous period was approximately HK$22.6 million.

The increase in revenue and losses generated during the period was due to the combined effects of the following factors: (1) the Group's revenue for the current period increased by about 45% to 50% compared to the previous period following a new contract obtained last year; (2) additional deferred default compensation involving completed projects during the current period; and (3) ongoing litigation and arbitration cases during the period resulted in significant costs associated with ongoing litigation and arbitration cases. Specifically, a partial ruling on liability and monetary issues in an arbitration case was issued in the first half of 2026, leading to additional legal costs associated with subsequent legal proceedings. Furthermore, the second stage hearing of the lawsuit is scheduled to begin at the end of August 2026.