LEADWAY TECH issues a profit warning, expecting a year-on-year loss of approximately HKD 5.2 million in the first half of the year
LEADWAY TECH expects to record a net loss of approximately HKD 5.2 million in the first half of 2025, compared to a net profit of HKD 2.1 million in the same period of 2024. The main reasons include a decrease in total revenue of approximately 13.5% to HKD 40.83 million, an increase in employee costs of approximately 10.8% to HKD 16.98 million, and a significant increase in administrative expenses of approximately 94% to HKD 7.35 million. These changes reflect the impact of the global economic slowdown, tariff disputes, and an unstable trade environment on the company's performance
According to the Zhitong Finance APP, LEADWAY TECH (02086) announced that the group expects to incur a net loss of approximately HKD 5.2 million in the first half of 2025, compared to a net profit of HKD 2.1 million in the same period of 2024.
The board believes that the shift from net profit to net loss is primarily due to the following factors: total revenue decreased by approximately 13.5% to HKD 40.83 million (previous period: HKD 47.21 million). This decrease is mainly driven by a reduction in the group's earnings, reflecting the adverse impacts of the global economic slowdown in 2025, ongoing tariff disputes, and an unstable trade environment. Increased economic uncertainty (including concerns over tariffs and geopolitical instability) has made customers more cautious when placing orders, leading to a decline in product demand and consequently reducing earnings during the period; employee costs rose by approximately 10.8% to HKD 16.98 million, with the increase mainly attributed to the introduction of a sales incentive program and the expansion of the technical and R&D departments to meet ongoing product development demands.
In addition, total administrative expenses increased significantly by approximately 94% to HKD 7.35 million, with the substantial increase primarily due to: the company's entry into new markets and diversification of its product portfolio, leading to increased resources for upgrading backend systems and higher administrative operating expenses; an increase in the number of trade shows in the first half of the year, as well as strengthened relationships with business partners, resulting in increased business travel expenses
